How NOT to Negotiate
4 October 2018
4 Key Points that could save you Thousands on your next Purchase
With 20 years of real estate experience, I can guarantee you that buyers who give too much information to the sales agent, are likely to pay more.
Key information, like your motivation, time frames and budget are all ammunition that the skilled sales agent will use against you in price negotiation.
One of the key reasons I am often able to acquire property below my client’s expectations is because the Sales agent does not get to read their body language or exploit their emotions.
A couple of Key points in negotiation is to find out as much as you can about the vendors, their motivations, their personal situation, why are they selling, how long as the property been on the market, if any serious offers that have been made and why they have been rejected and who set the asking price – Agent or Vendor?
Knowing this information gives you a great picture of how negotiable the vendors may be.
This information also allows you to assess what a reasonable offer might be for a property. Low ball offers without basis, only gets the negotiations off to bad start, but offering fair prices, regardless of how low they are, will in some way help educate the vendors to what the market level should be.
At the same time give very little of yourself away, “keep your Cards close to your chest” as they say and don’t ever give your price first.
Just as a Vendor usually hires professional representation in the form of Sales Agent, purchasers should also look at retaining their own independent professional by engaging a Buyer’s Agent.
If you are going to negotiate the purchase yourself, you need to adopt the following 4 Key Points as a minimum starting point;
1 . Don’t show your emotional interest in the property
2. Don’t tell the agent that you have already sold
3. Never reveal your budget or how much you are prepared to pay for a property
4. When negotiating always have an escape options – conditions that allow you to walk away from a deal, if something comes up that doesn’t feel right.
When inquiring about a property you need to stay aloof, and show disinterest, all the while gathering as much information about the property, the vendors and the local market as possible.
Once a sales agent knows that A. you really like the place and B. you can afford to pay for it, you are a sitting duck.
The key point to remember is that, no matter how helpful the sales agent is, their duty of care is to the vendors, and to sell the property for as high as price as possible. If you walk away from a deal thinking that was the best Sales Agent to deal with, because they really looked after you as the buyer! – well they are a great sales agent and you should use them to sell your house next time, because, they are bound by law, to look after their client’s – The Vendor.
Happy Investing
