Although negotiation should be viewed as a tennis match where there are two winners, if one of the parties feels they have run second in the match, it’s a regret leading to many other emotions that can stick with you for a long time.
The potential risk of leaving money on the table, affects home sellers in the main.
By leaving money on the table, I mean did the buyers have the capacity to pay more, but the agent (or seller, if taking the risk of doing a private deal) didn’t explore that possibility further?
We might not know it, but we negotiate with our spouses, children, work colleagues, bosses, customers everyday…
Everyone wants to brag about the deal they just did. Players on both sides of the net want to get that winning feeling, but as I said, sellers are the most likely to feel aggrieved if their expectations are not met.
This is one of the reasons the agent/seller relationship can sour – sellers believing their agent “didn’t go in hard enough” or “it felt like he/she was working for the buyer.”
Even in a hot market (sellers’ market) where buyers don’t have as much leverage because they are competing with other buyers, and hesitation or silly offers can see them coming up empty, agents can fall into the trap of becoming ‘order takers’ and they put their negotiation skills on the shelf.
Negotiation is almost an art-form. From experience, most of us are crap negotiators, although we negotiate ‘something’ or with ‘someone’ in our day to day lives.
We might not know it, but we negotiate with our spouses, children, work colleagues, bosses, customers everyday…but the outcomes we seek can fall short as we fail to negotiate using the leverage that may be at our disposal.
Generally, we just jump in and hope that the outcome we hoped for is achieved.
When it comes to selling your home, the biggest asset you own, understanding your leverage and the behaviours of buyers is critical to a successful outcome.
We tend to take for granted that our agent should be skilled negotiator, however in my experience, a good number of my colleagues are not.
And herein lies the risk of leaving money on the table.Time and time again, I’ve had buyers recount to me the conversations they had with other agents at other properties they have inspected, and I’ve shaken my head that much that I could feel my brain wobble.
By letting any buyer know a seller’s position or assumed acceptable price is the beginning of leaving a neat pile of cash on the table
The beginning of a negotiation is not when a buyer makes an offer, its is when they ask during or after an inspection, “How much will they take?” or “Are they negotiable?”
It’s the agents’ responses that have floored me when recounted by a buyer.
“Look, I’m sure they will take X.” or “Yeah, they probably are. If you offered X, you would be a chance of getting it.”
By letting any buyer know a seller’s position or assumed acceptable price is the beginning of leaving a neat pile of cash on the table.
Why? Because any buyer worth their salt is going to come in with an offer UNDER the number expressed by the agent and their stopping point, if they get there, will be that number!
Then, it is basically impossible to pull the buyer’s offer further north of the expressed number unless multiple offers are coming in (and this is another critical skill that some agents lack – dealing with more than one offer and positioning the buyers to compete fairly to secure the property).
Get the buyer to commence the game with a serve (offer) and then seek instruction from the seller as to what our next move is.
So, here is the best response to the “How much…?”, “Are they negotiable…?” questions…
Me: “The best way for us to find out is if you make an offer. Shall we start at the asking price?” Then I SHUT UP and wait for the buyer to talk.
This is the first introduction of leverage to the negotiation.
Get the buyer to commence the game with a serve (offer) and then seek instruction from the seller as to what our next move is.
Whilst professionally facilitating the buyer’s wish to pursue the property and eventually buy it, my job is to work for the seller and ensure the buyer is paying a price and presenting reasonable terms in line with the sellers expectations (or better) and current market conditions.
Clear the table – advantage seller!
