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Empower Wealth Blog post by Empower Wealth

What is the ONE thing in a negotiation that can get you across the line?

As Buyers Agents, when we are at a party or a BBQ, inevitably the discussion with a new person turns to work. “So, what do you do?” can give way to a whole night of exciting questions and tales about houses, real estate agents, property investing, horror and success stories. It’s almost as interesting a discussion as one you’d have with a casualty nurse or a psychologist, and sometimes even juicier. When it comes to property, people who are interested in the topic find themselves in one of two categories. Those who love negotiating and those who don’t. The latter group ask for tips and tricks all the time, such as “how do you increase your chances of buying at auction?”, or “what do I do when the agent tells me that there is another buyer making an offer on the property?”

We have written many blogs and articles on the art of negotiation, and successful property negotiation tips and tactics, but we haven’t ever talked about the ONE thing that can make or break a great deal.

Playing Hard to Get.

Someone once told us and say the best way to negotiate is to ask the question and then shut up. What he was referring to was asking for the order and then letting the customer make a decision on the spot whether to buy or not buy. His point was great, because a vocal salesperson can blow a deal if they ask for the order and then keep chatting. It undoes the momentum and can give the customer an opportunity to take their time to reconsider or walk away.

It’s a little bit of a similar case when it’s time to make an offer on a property. If you establish what the vendor’s expectation is, what the other potential buyers are thinking about doing, what the acceptable (and favourable) terms are, and what level of willingness the agent has to help sell to you, it’s then time to frame the offer. We make our offer clear, unambiguous and quick. Once we have confirmation that the agent has our offer (and also confirmation of his/her plans to meet with the vendor and reach a decision), we don’t hassle them. We don’t call them, we don’t email them and we don’t get nervous. We wait.

If the offer is a really sharp one (and particularly if the agent is an experienced negotiator), we need to make sure that we don’t give away our buyer’s fear, vulnerability OR higher buying power.

The agent may hold us out for a day. He/she may hold us out for two days. Generally speaking though, it’s unlikely that we will be kept in the dark for more than this time.

For anyone who has been through the challenge of buying a property, they will recall that it is probably one of the most nerve wracking times when they are waiting for the agent to get back to them. Our role in the process is to give our buyers reassurance that we are in control and we ar making the right judgement calls about the level of dialogue we have with the agent who is taking the offer.

Interestingly enough, only recently we had a very busy weekend where we had FIVE active negotiations running and one about to commence. We were completely focused and handling many calls over that weekend. We barely had enough time to update one of our buyers when another agent would call back with an update on ANOTHER property. We had ONE agent though who was playing hard to get. Our offer was significantly less than his vendors were hoping for and we knew that they were motivated sellers. Our buyers were calling and texting us every half hour for updates but we were so busy with my other negotiations, we didn’t even have the chance to call their agent; even if we’d have wanted to (we didn’t want to! We were playing hard to get). He eventually caved in on the Sunday and called to find out where our buyers were at. He mentioned he’d had a good inspection with another couple who were showing interest. We told him that our buyers in fact had just about given up on it and had found an alternative one as well to pursue. It bought back the negotiation to the starting blocks very quickly and we were able to make the deal happen on our terms. Sometimes the mere power of being quiet and appearing to be disengaged can motivate an agent to give up the game-playing and come to the negotiating table.

Obviously there are exceptions to this powerful rule, and they may be any of the following:

  • The agent has genuine interest and there are competing buyers. In cases like this, playing hard to get can break the deal for you because the agent WILL sell to the other buyer if you aren’t in the negotiation.
  • The agent isn’t bluffing or delaying
  • The contract HAS to be executed within a certain time frame (ie. someone is going overseas, or a company/SMSF/entity needs to sign a contract by a certain date)
  • If the agent hasn’t really got any offer from you (or if you have been unclear/ambiguous)
  • If the agent is your BUYER’S AGENT (because we work for YOU, the buyer!… and we do need you to call us back!)

So before you feel close enough, friendly enough or safe enough with the selling agent, remember…. They work for the vendor and their job is to get the highest price from you. Be strong and don’t call back twice. Wait. It can cost you thousands if you get emotional and call one too many times.

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