Why property negotiation is about much more than price.
Transcript:
Hi and welcome! In this week’s Bush Bite, we continue our special series on the art and science of negotiation, given the critical importance of your ability to negotiate in all aspects of your life and especially in the current hotly contested property seller’s market.
Over the last few weeks, we’ve discussed how you may need to change your outlook, how to build good rapport by using mirroring and labelling techniques, and the perceived power position which you may feel is tipped against you. We also looked at why cash is king, how to know the prevailing conditions that negotiation starts with ‘hello’ and how and when to make a knockout offer.
This week we delve into your awareness that negotiating on the purchase of a property is not just about price. Need to find out what the vendor bindle really wants and what’s really important to them. From there, everything is up for negotiation, from the timing to the conditions to you name it. Everything is always up for grabs, and it starts by making sure that you’re asking the right questions. It takes some digging and professional buyers agents are real experts at this. It’s about asking the right questions in the right order, at the right time, in the right way to find out exactly what the seller wants and needs, because it’s not always just about selling for the best price.
For example, if there’s a divorce involved or the vendor has left the state to move to a new job, there could be more motivation to have a quick settlement time frame. Alternatively, someone may have a real preference to have the perceived security and certainty of an unconditional contract, rather than anything that has conditions like subject to finance or subject to a building inspection. This means that in some cases, the perceived certainty of an unconditional contract that a lower price might be more attractive to a seller than a higher price, with conditions attached. In other cases, the seller may be interested in the early release of your deposit to enable them to help secure their property or whatever they have in mind to use the funds for.
Timing is also very important in this regard. It’s also worth considering the real estate agent’s motivations as commission-only selling agents. They’re often under pressure at the end of the month, the end of the quarter or of the end of the year to reach their sales targets, so they may be more motivated to make a sale happen in your favour of these times, as it affects their ranking in the office and their cash flow.
As the famous author of ‘The Seven Habits of Highly Effective People,’ Stephen Covey famously said, first seek to understand and then be understood. This is very important in negotiating the purchase of property. Find out what it is that they want so you can create a win win win scenario, as well as creating other valuable negotiating points that are away from the straight price. This also means that you’re actually separating your offer from others and effectively reducing the competition with other potential buyers as you aim to satisfy the seller’s total needs. Not just how much they’re going to get in dollar terms.
To summarise, price is not the only factor in a property negotiation. If you find out what the seller really wants, then anything is potentially up for grabs. And towards the end of the month, the end of the quarter or the end of the year, the agent might just be more motivated to sell, except your offer.
In next week’s final negotiation special Bush Bite, we will dig into the need to have alternatives and go more into the importance of timing. We will reveal the ‘other fish in the sea strategy’ and the importance of engaging professional help before summarising all of the key negotiating points that we’ve covered in recent weeks so that you’re fully armed to successfully negotiate your next property purchase or in fact, negotiate any future transaction. That’s more food for thought.
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