- In this last (eleventh) article on negotiation, Bushy Martin summarises his advice
- Think about the timing of your offer, and have alternative properties up your sleeve
- Be as prepared as you can be, and consider seeking professional advice
In his final article in the series, investor, founder, author and media commentator Bushy Martin discusses the science and art behind property negotiation.
Consider seasonality when you are buying a property. There is generally less demand in the winter and the most demand in spring, so buying property during the quiet times can be to your advantage.
And on a micro-scale, a successful tactic that I have employed is to make an offer on a Friday night before the weekend open inspections so that you effectively take a property off the market before others get the chance to see it.
Other fish in the sea
When you are making an offer on a property, always make sure you are perceived as someone who is considering two similar properties.
What I mean by this is the selling agent needs to think you always have a suitable and viable alternative property you are also considering – let’s call it option B.
If you’ve been out and about looking at property, you will be familiar with a lot of real estate agents saying, “Hey look, I just need to let you know there’s another buyer in the mix”.
This is ‘Negotiating 101’ for the agents, but you often don’t know if this is true.
So a good counter to this is to say, “That’s great. I’m still interested in the property, but I also have another property I’m interested in”. This way, you still show that you’re keen, but also that you’re not desperate for the property.
Equally, depending on the market you’re in, you can say to the agent, “Hey, here’s my offer. Just letting you know, I’ve put two offers in at the moment on two other properties I really like. So whoever gets back to me first is going to be the one that we take.”
Again, this gives you a position of strength, provided the market dictates that you can actually do that.
Consider professional help
If you’re looking to purchase a property, it’s important that you’re armed with as many winning negotiating tactics that you can when you’re up against fierce competition and you’re dealing with a real estate agent who negotiates all day, every day for a living.
So, if you don’t come prepared, chances are you are going to be outmatched during the crucial negotiation phase.
And this leads me to the biggest tip I can give you to optimise your chances of securing the property you want at the price you want under the terms you want – engage an independent expert buyers’ agent.
It still staggers me that with over half a million home sales a year in Australia, only about 2.5% of them involve a buyers agent.
This compares with 45% in the USA, where most buyers engage a professional buyers advocate to find, negotiate and secure the property on their behalf. This is in order to level the playing field and to eliminate the biggest risk in a property purchase – you and your emotions, because you just don’t know what you don’t know and this can be very costly when it comes to property purchases.
11 pieces of negotiation advice
- You may need to change your outlook
- Build good rapport with those you are negotiating with
- Use mirroring and labelling techniques
- Be aware of your relative perceived power position
- You may feel things are tipped against you
- In all negotiations, cash is king
- Know the prevailing market conditions
- Every negotiation ‘starts with hello‘
- Know when to deploy the knockout offer
- Negotiation is not just about price
- Have alternatives, and seek professional help (see above)