Compromise, debate, diplomacy, discussion, mediation, transaction, agreement – the world of negotiation seems quite daunting, especially when it comes to putting houses for sale and dealing with thousands, if not hundreds of thousands of dollars.
Most purchases we make have a set price tag, and an expectation that that’s exactly what you pay. So negotiation seems to make us all a little uncomfortable. Ever balked at the idea of asking for a discount on a slightly damaged item? Fretted that your offer was way too low? Or agonized over what would be considered a reasonable tip?
Negotiation is all part of the business in real estate – it’s a key contributor in getting a seller the price they want. And it can mean thousands and thousands of dollars – profit or loss – depending on the skill of the negotiator.
When it comes to selling real estate, anyone can take a few nice photos, pop a sign up, write an ad and get their property on the internet in the hopes of attracting the right buyer. But what most people struggle with is the negotiation. How hard can I push? Will that price scare them off? What is a reasonable ask?
Negotiation is the key – and that’s primarily what you pay an agent for.
Yet research shows that fewer than 5% of agents have actually read anything on negotiation. Scary stuff. If your agent can’t show superior negotiation skills then all you’ve hired is an overpriced advertising representative.
It comes down to asking a few questions of your agent before you appoint them to sell your property. Check whether they really have nailed their negotiation skills, by asking them these questions:
1. How much have you read on negotiation in the last year?
2. If a buyer asked these questions, how would you answer?
- How much is this property? The agent should offer the asking price and nothing more. But, they should also swing the question back to the asker, in terms of asking how much they think it’s worth.
- How long has it been on the market? It may have been on for a while, but a good agent should phrase the answer in consideration of a change in the marketing, rather than focus on the length of time on the market, ie. “At this price it’s been on the market for two weeks.” Focusing on the length of time on the market can make buyers think they can get it at a bargain price because the seller may be desperate.
- What will they take? Literally all an agent should say is the asking price – they’re not at any discretion to say more. And saying more sets a limit for what a buyer will go to.
3. Can you show me your sales results – especially those where you’ve achieved asking price, or above?
And note, when the agent is discussing their results, if they’re talking auction, be careful not to confuse the Reserve Price, the lowest price a seller is willing to accept, with a price the owners were HAPPY to accept. There is often a big difference.
It’s been said, that if an agent sells a property for anything less than a buyer could have, would have, or should have paid, then the agent has failed the client.
Of course, there’s got to be a little bit of movement in a price – that’s what negotiation’s all about, but nudging the movements upward is a genuine skill. So take negotiating ability seriously when you go to put your property for sale, and do the due diligence on the agents you’re interviewing. If they’re good at what they do, they’ll be happy to show you their results. And you’ll be happy with the results they give you.
If you want more fair, unbiased advice on selling your property, from a team trained in negotiation, talk to us.