When I first started as a property buyer’s agent over 15 years ago, I thought I would have to learn how to be a tough negotiator. I imagined I would be standing up to those pushy agents and getting a great deal for my clients. How wrong was I and I think its interesting what I’ve learnt over the years.
I was provoked into thinking about this with all the 24/7 news about Donald Trump. I realised there are two different ways to do a negotiation: “adversarial” or “relational”. Dear Mr Trump is obviously an adversarial negotiator. These days, that style and behaviour is probably outmoded, out-dated and basically dysfunctional.
Personally, I have found that the best deals and best outcomes always happen after building a strong relationship with whomever I am dealing with. As a buyer’s agent, my focus is to uncover all the relevant facts first and then use that information transparently so everyone is on the same page. Build a relationship that is open and transparent with the idea of attaining the best outcome for all involved.
These are the things I have learnt:
1. Don’t make it all about the money
I always hear people say don’t give anything away while inspecting a property. “Keep it tight to your chest” is often the advice. Yes, don’t expose your spending power right from the start but you should say clearly what you want and what works for you. Find out about the property, its owners and reason for selling. Remember the four Ds behind property sales – death, divorce, debt and downsizing. Whats the D behind this sale. Build a relationship with the agent and the vendors as much as possible. Agents are people too and not your enemy.
2. Don’t make ridiculous bids
I sometimes get clients asking me to make an offer way below the listing price. I ask them to put themselves in the seller’s position. People can be very sensitive and emotional about there own homes. Often they have put a lot of their own heart and soul into it. They are also very emotional about money. The worst thing to building a good relationship is making a low-ball, gambit bid and insult the owner.
3. What else will help make the deal happen?
Once you find out a lot of about the property and situation, sometimes there are other matters beside the price that can be important. Do the sellers want a longer or quick settlement? Is the furniture included? Are there issues around a pest or building report? Waive the cooling off period? Is the finance firmly in place? Perhaps the vendor needs some time to rent back the property for a time while looking for a new place. Factoring in some of these variables can assist in the sale and help get that contract signed.
4. Do the work for the agent
Although its good to be transparent and develop good relationships, there is nothing wrong with exploiting a major weakness within the real estate industry. Agents are working for the seller, but in essence, are getting paid by the buyer. This is an inbuilt conflict of interest and there is nothing wrong with enlisting the agent onto your team to facilitate the sale. Agents are often busy and stressed, if you can make the deal as easy and stress-free as possible you are a long way to getting the deal done. There are many strategies to do this but mainly making the offer as uncomplicated and free of conditions as possible helps a lot.
5. Be decisive
Either be prepared to walk away or go early, go hard! Don’t be indecisive or wishy-washy. Be prepared to hold the tension and know your limit. It is good to have another option so you are not fixated on one property. But if you know this is the one and you want it, don’t hesitate, make a bid, meet the price and get it done. I have seen many deals go south because of pride, ego, small amounts of money or playing stupid games or tactics.