THE ART OF NEGOTIATION

August 2010 - Author: Maureen Logan

The success of any real estate negotiation is all about two parties achieving an agreement despite having completely different objectives. On the one hand, the vendor has a property to sell, hopefully for as much as possible. On the other hand, a buyer, who generally wants to get as much real estate as they can for as little money as possible. As a real estate agent, our role is ultimately to act in the best interest of the vendor, but to achieve this objective we need to play the role of negotiator and at times, facilitator of ideas that will help to produce the best outcome for both parties. Buying and selling real estate is a major transaction for every Australian. It is an emotional experience, and may even result in the odd sleepless night, but what our experience tells us is that there is almost always a way to strike a deal. This is where the benefit of using an agent really shines through, and as many vendors and buyers discover, negotiating price is often far from the only solution to helping both parties get what they want. Following are just a few examples of the variables that can become relevant in a negotiation. Price The price a vendor wants to sell for and the price a buyer is willing to pay are often at odds with each other, but the reality is that this is just the starting point in the negotiation. The price that the market is going to pay is very dependent on factors such as the number of genuine buyers there are competing for similar properties, and the condition and features of the home relative to similar properties in the same price bracket and area. Time and timing Time is something that many people don’t think of as having a value, but it can be extremely valuable when it is put in the context of a real estate negotiation. There are many reasons why a vendor or a buyer could want a quick or a long settlement. For example, vendors are generally keen to settle as quickly as possible, but there may be situations when a buyer requests a longer settlement but is happy to pay the vendor’s full asking price. This may exceed other offers by thousands of dollars. If the vendor is in a position where a longer settlement doesn’t impact negatively on them in any way, then this is an offer worth considering. Rent-back For some vendors, the opportunity to rent their own property back for a while after the property has sold can be very beneficial. This arrangement can be equally beneficial for a buyer who may not be ready to move in because their own property hasn’t sold, or if they are an investor. What stays and what goes A vendor is usually very explicit about the chattels that stay with the home, or leave when they do, but there are times when a buyer may become absolutely besotted by furnishings and fixtures that are listed to go, and include them in their offer anyway. Throughout the history of real estate there have been more than a few properties sold that ended up including chattels that were previously off limits - occasionally, everything right down to the chinaware. This sort of offer can be quite lucrative for the vendor and is certainly worth consideration. Repairs and changes By the time a property is on the market and offers are starting to come in, the last thing a vendor is thinking about is making changes to their home, that is unless the right offer comes along with just a few conditions. There may be buyers who want the property but also want improvements made before they move in. This isn’t as bad as it sounds, particularly if they are paying top dollar for your home and are funding all the costs. If it’s the best offer on the table, it makes perfect sense unless time is not on your side. they are an investor. Source: The Property Informer Issue Two - 2010 - Bowden Printing Pty. Ltd.

Back to News Page