Negotiating The Best Price

Negotiating The Best Price

There’s a massive misconception that the job of your estate agent is to advertise your home.

If they’re good, they’ll take high-quality pictures, floorplans and even a video.

They might even create a post on Facebook and LinkedIn. And though yes, an Estate Agent needs to be an expert marketer, they also need to be expert Negotiators.

Your Buyers’ first offer is seldom their best offer. And even a 1% increase can mean thousands of pounds more, for you.

If you’re using an Online Agent or a D-I-Y type of service, there may be no professional negotiations at all.

So I thought I’d create a few videos and offer you some real-life tips, on how I’ve successfully negotiated a higher price for my clients, over the past 25 years.

When it comes to Negotiations, there seems to be an air of mystery about how negotiations take place in an Estate Agency.

Anyone not familiar with this art might imagine the conversations between a Buyer and your Agent similar to that between a market stall owner and customer. But there’s a lot more to negotiating than ego and posturing.

Here's a step-by-step guide as to how I achieve the best price for my sellers.

IDENTIFYING A BUYER – SETTING THE BOUNDARIES 

So let's set the scene. A potential Buyer has viewed your property for a 2nd or maybe 3rd time. If they are interested in placing an offer, on most occasions they’re going to ask the following question:

“Is the Seller flexible on their price?” This question is one of the most frequently asked questions. It's also one of my favourites because firstly, it highlights the person as a potential buyer. And secondly allows me to set the boundaries from the outset, should we get into negotiations.

My answer varies depending on a few factors.

For example, if the home needs refurbishment, I might say.....

“Yes, the Seller is very realistic on their price. But there are two points to note.

The first is that the Seller is happy to offer the property subject to a survey – so if a Mortgage Surveyor thinks you’re paying too much for the property, the Sellers will reduce their price accordingly.

However, I don’t think it’s fair if you’re asking a reduction in the price to fund your refurbishment project.”

If the home is immaculate and is marketed for a premium price, I might say.....

'Consider the house down the street wasn't in as good condition and sold for 'X', how much more do you think this property is worth considering it benefits from [name of features]?

STOP LOW-BALL OFFERS – GETTING BUYERS IN THE RIGHT FRAME OF MIND

So the next tip is that Before your Buyers place an offer, they need to be in the right frame of mind.

What I mean by this is, in my experience Buyers will try to pick fault with the house to try to justify a lower price.

And if you get into negotiations whilst the Buyer is pointing out negatives, you will find it very difficult to negotiate the best price possible.

So How do I do this; I ask a very simple question Before I feel an offer is going to be placed. I ask “So now that you’ve seen the house a few times, is this the home for you or should I keep look?”

It’s quite a direct question.

And if the answer is yes, and again before I ask them to place an offer, I’ll ask What their favourite features are.

Alternatively, I could ask “What are you most looking forward to once you’ve moved in?

The important message I’m trying to share here is that once the Buyer starts saying how much they love your home, that’s the time they’re going to place a more realistic offer.

And the beauty about the question is that they can’t start saying how much they don’t like your home in the hope they can place a low offer.

Otherwise, they’ll look very silly.

Because on the one hand they’re saying the house is perfect for them, but then they’re trying to pick fault.

GENUINE REASONS TO ASK FOR AN INCREASE

So to set the scene, your potential buyers are talking positively about your home and have placed a realistic offer.

So most agent may Thank the applicants for the offer, some agents may start asking questions about financial qualification.

But before we get into all of that, there’s a question which I’ll ask, which will give me and You, an idea of whether the buyers could increase and that question is as follows, “Thank You very much for your offer, may I ask, why do you feel this is a fair price?

I love this question, it doesn’t matter how close or far the offer is from the asking price, I always ask it.

By asking this question I want to find out if the Buyers are trying their luck, or have they got a genuine reason.

The way they answer their question will give us a massive clue as to whether there’s any chance the buyers would increase.

And finally, the reason they give will be the basis for why I ask for an increase.

For example, if they say, a similar house sold in the street 6 months ago, I’ll be going back with evidence of how property prices in the road have increased in the last 6 months.

I’ll also be pointing them as to whether they can verify the data, independently.

REJECT THE OFFER, NOT THE BUYER

So lets set the scene, I’ve received an offer, but it's too low.

How do I say no without doing what most other agents do, which is to offend the Buyers?

The tip is to separate the Buyers from their offer.

Just because I’m rejected their offer, doesn’t mean I’m also rejecting them as a Buyer.

At this point, I'm confident enough to be honest and say something like this. “Thank You very much for your offer”.

Even though the Sellers would love to sell you the home, based on your position and being financially qualified, if the Seller accepted your current offer, they wouldn’t be able to buy their next home.

Would you consider negotiating where you’ve still got a great deal, but the Sellers can afford to move on too?

By staying humble, I’m inviting the buyer to enter into fair & proper negotiations.

CREATE WIN-WIN SITUATION

As I said in the introduction, there’s a lot of myths surrounding negotiations.

What one should say. How one should act. How one responds.

I hope you’ve picked up lots of tips and bear them in mind when you’re choosing your agent.

Please don’t chose an agent based on cheaper fees. Choose the agent who you’re confident will negotiate the best price for your home.

The last tip I want to share is that when negotiating, make sure your agent creates a win-win solution for both yourself AND the buyer.

I hope you’ll agree that none of the tips I’ve given you is based on hard sales.

And at no point are we disrespectful of the buyers.

But in England, a lot of Sales fall through and don’t forget there are still hurdles before you get to Complete.

If the Buyers feel that they’ve been taken advantage of, they will look to use any opportunities to get a reduction on price.

With this in mind, apart from the price, are there any terms which the Buyers would like included in the deal?

Would they like to complete by a certain date?

Would they like the property to be taken off the market?

I’m very proud that in the first 18 months of trading, I achieved a 100% Listing to Completion record.

That means that Every Seller who chose us as their agent went on to Complete. That, with 100% 5-star ratings from Both Buyers & Sellers.




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Heenay Joshi