shares her top tips.
1. Using ‘stock on market’ information.
While a certain type of property in a specific area should have a price tag commensurate with other houses of its type in an area, supply and demand will adversely affect the predictability of a sale price. Often I will deliberately source property in an area based on the buying advantage at the time; for example, if a three bedroom dated house is on the market alongside many others of its kind. This ‘micro glut’ can give a buyer anything up to a 5 per cent edge, and possibly beyond if the glut is serious.
2. Finding out enough about the vendor’s plans and expectations.
If you have this information, you can make an offer compelling to them, and with the focus on their ‘terms’ needs as opposed to their preferred price. For example, I recently negotiated a fabulous price on a property based on appealing to the vendor’s needs. She was going to auction that Saturday for a property she loved; so I staged the settlement date to either give her the 63 days required, or alternatively (at her request), to convert to 120 days should she be unlucky and miss out. This meant that she had flexibility with her own arrangements and could comfortably bid on the property she loved.
3. Having a robust comparable sales analysis to equip the agent with to defend your offer.
Agents will often tell the vendors an optimistic target in order to get the listing. In these cases, the agents then have to defend the offers they receive from buyers and entice the vendor to accept the market sentiment in relation to the real value of their property. This is known as conditioning the vendor and most vendors are loathe to tolerate this with the agent who initially told them the big price in the first place. I find that if I am the bad guy who gives the agent the supporting information to defend my price, the agent and their vendor are more willing to consider the lower offer. Scientific analysis and supporting documentation might be bad news to a vendor who wanted a dream price, but this form of information is generally considered and often accepted by a vendor.
4. Making two different offers with differing terms.
Rather than offending a vendor with a low price, I often submit TWO prices. The low one has the terms which are enticing, but the higher offer has tough and almost intolerable terms. The win for the vendor and their agent is that the vendor has choice. Obviously I need to be prepared to honour both, so I make sure that the ‘win’ for my client (in the event that the vendor picks the higher offer), is strong enough to make the deal worthwhile for them (i.e., super-long settlement with access prior to commence works).
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Negotiating doesn’t come naturally to a lot of people. It’s scary, daunting and intimidating. But with a bit of research and insider knowledge, you too can score a great deal using the tactics that the industry’s top agents use. Empower Wealth’s buyer’s agent