Negotiation Tips for Buyers and Sellers
Whether you’re a buyer or seller in Toowoomba, being smart about how you prepare for negotiation and navigate the process is what will land you the best property deal.
How easy it is to buy or sell a property, and what price you can reasonably hope to achieve or pay, depends on many factors. Sometimes it’s a seller’s market, with limited stock and high demand. Other times, a buyer’s market presents unique challenges for sellers. Either way, understanding how to negotiate will help you ensure the best outcome.
Whether you are buying or selling, the main key to successful negotiation is understanding a property’s true market worth. This ensures that you don’t overpay or accept an offer that is significantly lower than what the market may actually bear.
This requires doing your homework and finding out what comparable properties in your area have sold for in the last three to six months. A knowledgeable, local real estate agent will have access to all of the latest figures. They’ll also be able to tell you about which way the market is trending and any other factors that may impact prices, such as new developments, changes to local zoning regulations, or local buyer and seller trends.
Understand the other party
If you are a seller, you want to get a good feel for how many prospective buyers are in the current market. How much demand will there be for your property and what can you do to enhance its appeal? When it comes to negotiating with interested buyers, your real estate agent will have had enough contact with them to have a good sense of how serious they are and factors that may affect what they’re willing to pay.
If you’re a buyer, it can be helpful to know the seller’s motivation. You can reasonably ask real estate agents questions about whether the property is the owner’s primary home or investment property and why they are selling. Has the property been on the market a long time? If so, they may be holding out for the right price. Or are they looking for a fast sale because they’ve already bought something else?
Keep emotions out of the picture
It’s easier said than done, but both buyers and sellers need to make decisions based on logic and the current market rather than emotion.
Sellers, particularly those who are selling their family home, can have an emotional attachment to getting a price they feel matches their home’s perceived worth. Buyers can also become overly attached to their ‘dream home’ before a sale is done and dusted.
Each side needs to know their limits. Before you go into any negotiation, decide what is the absolute highest figure you are willing to pay or the lowest price you will accept. Be firm that you won’t budge on this no matter what. If you’ve done your market research, listened to your selling agent and crunched the figures to know your budget, you can’t go too wrong if you stick to this one single strategy.
Be open to counter-offers
You will need to be flexible during the negotiation process.
In a seller’s market, sellers will not jump at the first offer, so you will need to have your counter-offer ready.
Likewise, if it’s a buyer’s market, be prepared for your interested parties to offer a low-ball price first-up.
Take the time to really evaluate offers before going straight back with a counter-offer. Being open to sweeteners, such as a longer or shorter settlement, can help smooth the negotiation process and get a result everyone is happy with.
Consider enlisting help
If you fear you will get swept up in emotion during the negotiation process, see if a friend or family member can help you stick to your maximum bid or sale price. Buyers may want to seriously consider using a buyer’s agent. They have extensive experience in the process, have honed their negotiation techniques, and are objective enough to walk away. They may also know about off-market sales that represent good opportunities with less competition. The money you save on getting the best price can more than offset a buyer’s agent’s fees, as well as save you a lot of time and stress.
Best and final offers
Sometimes a selling agent decides the best tactic is to take a property to auction. Other times they will cut to the chase and request “best and final offers” from interested parties. As a buyer, this is the time to go all-in with your highest offer if you really want to secure the property. If you’ve done your market research, worked out what your mandatory requirements are, as well as your budget, you can now move fast with confidence.
Contact the experts today to find out how we can help you manage the property buying or selling process.