Want to stand out from the pack in a hot property market? Come in with a knock out offer. Let’s talk about how.
Hi and welcome! In this week’s Bush Bite, we continue our special series on the art and science of negotiation. Given the critical importance of your ability to negotiate in all aspects of your life and especially in the current hotly contested property seller’s market.
Now, over the last few weeks, we’ve discussed how you may need to change your outlook to build good rapport by using mirroring and labelling techniques and the perceived power position, which you may actually feel is tipped against you. We discuss why cash is king how to know the prevailing conditions and that negotiation starts with hello.
This week we delve into the advantages of the ‘knockout offer.’ So the next step to consider in an overheated seller’s market, such as we’ve got today where there’s many more buyers and sellers, is to consider making what’s called a ‘knockout offer.’ A knockout offer goes in fast for a quick, mouthwatering sale and a very enticing price. It’s an offer that the seller is likely to accept, as it could be more than they would have expected to get, so quickly. It gets the whole process of selling their property over and done with for a good outcome.
Now, not all sellers will accept the quick offer, but many would if they don’t want a long, protracted sales process. However, before contemplating this move, make sure the following three conditions are all in place. Firstly, you’ve done your homework on the area and the property with detailed property research reports from the likes of CoreLogic, www.buyersbuyers.com.au or Risk Wise.
Secondly, you know what the true value of the property is, which is often not the agent’s advertised listing price or range, and it’s got to be based on properties that have actually sold recently around the area. Thirdly, you’re going to be holding the property long term and understand that paying an extra 10 000 to 20 000 plus or more now, will be worth a lot more to you in the future. If all of these factors are place, then consider putting in a knock out price, up front and early. This will be attractive to the selling agent who’s often looking for a quick sale so they can get paid and move on to spending their time on there are other listings. A knockout offer also puts the competition at bay and should get the seller’s attention.
Over the years, I’ve seen many buyers who are afraid to put in an early knockout offer or bid if it’s at an auction. They wait for the competition to build over time, and ultimately they can end up paying more than the price they would have done had they offered a knockout offer right from the start. And if you’re not confident to do this, an independent buyer’s agent acting on your behalf can do it for you.
So, know the value of how much you’re able and prepared to pay for the property and consider making a knockout offer, particularly in a seller’s market where many buyers are competing for fewer properties. This may just blow the competition out of the water and secure the property sooner rather than later. And long term, it could be a good deal. Certainly, it can be better than a long, drawn out, emotional, frustrating process.
So to summarise the key points from today’s discussion on making a knockout offer, remember that it takes confidence and audacity to make a knockout offer, however, under certain circumstances you could end up paying a really good price long term. Now, some people are wary of this tactic, but it may be worth considering, particularly in an overheated seller’s market.
In next week’s negotiation special, BushBite I will reveal how negotiation is a lot more than just the price.
Want to unlock freedom with property and finance? Let’s talk.