The Australian property market has fallen somewhat from the lofty heights of two years ago. Although auction clearance rates have risen to around 75 percent in Sydney and 33 percent in Brisbane, this is a far cry from what they used to be.
Stock is low, and buyers are everywhere, clamoring in driveways on Saturday mornings country-wide. As a vendor, this is the key to achieving the price you want: breed competition, see results.
The Book of Five Rings by Miyamoto Musashi, originally written from 1663 to 1665, is concerned with military negotiation and places importance on patience, respect (formality), knowing your enemy (language, culture, training), practice (repetition), mental alertness, and concentration. At Avnu, we’re more peace-inclined than Miyamoto Musashi, but we see his point: you need a born negotiator on your side, not an order taker. You don’t want to be the one generating all the ideas and striking all the deals. Do your research, and find someone with the necessary skills.
A Born Negotiator:
- Understands buyer pain points
- Provides buyer’s background – have they missed out on properties, have they seen others they like; “what did they like?”, “what losses will buyer incur if they dont go ahead with purchase?”
- Asking right questions
- Good first impression
An Order Taker:
- low negotiating skills
- no story behind offer
- low communication skills
- Provides no background on buyer
- Not a good first impression
Allow me to elaborate. The following is your checklist; use it.
Provides buyer background.
A comprehensive buyer background helps you understand exactly which prospective buyer is best suited to your property, and provides a base on which to convince them. For example; is the prospective buyer selling themselves? If so, in 30 days (as an example) their house sells and they will be without a house. Then impress on them all the features of your house that perfectly suit their needs. A Born Negotiator will get the buyer to recognise the urgency.
This is preferable to three offers and no story – this is an Order Taker who hasn’t done their research. Don’t trust an offer without a background.
A risk assessment is an evaluation of things that may impact on the future value of your property. However, this can incorporate elements of a technique called “risk shifting”, or reallocating value degrading responsibilities to another party (buyer, bank, seller etc). This can be contentious, and an agent has got to be doing this in a way that the buyer won’t become aggravated, but also in a way that the end result will be more money on the seller’s table – for this, your agent has to build a strong relationship with the buyer to pull this off.
This is not as exciting as it sounds. What it means is asking your agent to role play their dialogue that they would use with the buyer on you, pretending to be a buyer, to show how they intend to reach a conclusion. This is how you understand what sort of impression they impart, and how good of a communicator they are in helping the parties to see the relevant facts and motivating them to achieve the desirable outcome.
Qualify the buyer
Qualifying is finding what stage of the process the prospective buyer is at. Have they had their finance approved? Are they just looking? Have they missed out on properties? The answers to these kinds of questions will inform if the prospective buyer is actually a priority.
These are a necessity in ascertaining and quantifying the principal parties’ true interests and objectives and the tradeoffs among the various issues of concern to the various parties. In short, being able to create a picture of the prospective buyer’s true needs by piecing together what they have said, what their background says about them, property information and all the other forms of information that crop up. Asking for an example of prior deals the agent has negotiated could be a good way of determining their analytical capabilities.
Your agent needs to display flexibility in developing multiple options for addressing the issues and getting others to cooperate to reach an agreement.
Ask the hard questions
Your agent works for you, and they are accountable. You are completely within your rights to ask questions about their professional life. Some questions to ask include:
- Does the agent regularly get increases from buyers?
- Is the agent looking to use the private treaty method and negotiate with all interested buyers, or does the agent want to auction the property, not provide a price and use the emotion of the buyer to help secure the best price?