Negotiating the purchase price of the property you are intending to buy or sell has been compared to everything from contact sports, to hostage situations. With the help of some experts, Bliss Conveyancing has put together some tips for taking the awkwardness out of the situation and getting a better result.
Prior Preparation Prevents Poor Performance
Alliteration aside (and some of you know there are a couple of more P’s in it sometimes), there is simply no substitute for preparation. According to Macquarie, preparation is the number one thing that you can do to improve your confidence levels going into the negotiation.
The most effective preparation involves:
Research – make sure you understand the market you are in and the drivers of value that it dictates. You can get a handle on this from your agent, research houses like Domain, or your own review of the local area.
Motivations – understanding the motivations of the other party will give you some insight into what aspects of the negotiation they might be prepared to move on.
Be Ready To Pay – if you can get agreement on a price and then cannot obtain the finance, or otherwise don’t have enough to complete, then the negotiation is wasted. You also will not be likely to re-establish negotiations again.
Crafting The Irresistible Offer
The best offer is always something that leaves both parties feeling like they had to give something up, but the outcome is still acceptable. Most experts recommend avoiding the ‘low ball’ (or outrageously high offer if you are the seller) as it tends to work against your negotiation by putting the other party off right at the start.
Also, if you are going to dangle the FOMO strategy by stating “We are also looking at a property in the next street”, make sure you do it well before the negotiations have started. Otherwise it simply appears to be a last minute throw away and can actually work against you in your negotiations.
Informal offers can also be a useful tool to avoid you being ‘crunched’ by the agent. A simple text message or email, can give you some instant feedback on where you can get to before the formal negotiations commence.
Leave Your Emotions In The Car
Or leave them at the door, is the advice that Canstar gives. Either way, if you let your emotions get the better of you and give the other party a peak into your overwhelming desire to buy (or sell) this property, none of your preparations or crafty offerings will be of any use.
Make sure that you have a clear picture of what you want and before you start, set yourself a maximum or minimum price at which you are prepared to walk away from the transaction. This will avoid you getting caught up in the moment and agreeing to an unfavourable price.
If you would like an introduction to a buyers agent, valuer or other property professional, please get in touch with Bliss Conveyancing and we can arrange an introduction.