To close out this special series on negotiation, we look at the importance of timing.
Transcript:
Hi and welcome! In this week’s Bush Bite we finalise our special series on the art and science of negotiation, given the absolute critical importance of your ability to negotiate in all aspects of your life and especially in the current hotly contested property seller’s market.
In recent weeks, our negotiation specialists focussed on 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 feel is actually tipped against you. We covered why cash is king and how to know the prevailing conditions, and that negotiation starts with ‘hello.’ We’ve revealed when to deploy the knockout offer, and that negotiation is not just about price.
This week, we conclude our negotiation series by honing in on the importance of timing, the effectiveness of the ‘other fish in the sea’ strategy and the importance of independent professional assistance before summarising all of the key points from my negotiation series.
So let’s kick off with the importance of timing, because it pays to consider seasonality when you’re buying property, and this is generally less in demand in the winter and the most demand in spring. So buying property during the quiet times can often be to your advantage, and on a micro scale, a successful tactic that I’ve personally employed in the past is to make an offer on a Friday night before the weekend open inspections so that you effectively take a property off the market before the others get a chance to see it. Then it’s worth considering the ‘other fish in the sea’ strategy. When you’re making an offer on a property, always make sure you’re perceived as someone who’s seriously considering at least two similar properties. What I mean by this is a selling agent needs to think that you’ve always got a suitable and viable alternative property that you’re also considering. Let’s call it Option B.
If you’ve been out and about looking at property, you’ll be familiar with a lot of real estate agents that say, ‘hey look, I just need to let you know that there’s another buyer in the mix.’ Now this is negotiating 101 for the agents, but you often don’t know if this is actually true. So a good counter for this is to say that’s great. I’m still interested in the property, but I’ve also got an interest in another property. This way, you still show that you’re keen, but also that you’re not desperate for the property. Equally, depending on the market you’re in. You can then say to the agent, ‘hey, here’s my offer, but just letting you know I’ve put two other offers in on other properties that I really like, so whoever gets back to me first is going to be the one I take.’.
Again, this gives you a position of strength, provided the course of the market dictates it can actually do this. Then there’s a need to consider independent professional help if you’re looking to purchase a property, particularly in an overheated seller’s market. It’s important that you’re armed with as many winning negotiating tactics that you can, particularly when you’re up against fierce competition and you’re dealing with a real estate agent who negotiates all day, every day for a living. So if you don’t come prepared, chances are you’re going to be outmatched during the crucial negotiation phase. And this leads me to the biggest tip I can give you to optimise your chances of securing the property that you want at the price you want under the terms you want. Engage an independent and expert buyer’s agent. It still staggers me that with over half a million sales of property each and every year in Australia, only about 2.5% of them involve a buyer’s agent.
This compares with about 45% in the USA, where most buyers engage professionals, buyer buyers, epica to find, negotiate and secure the property on their behalf. This is in order to level the playing field and to eliminate the biggest risk in a property purchase, which is you and your emotions, because you just don’t know what you don’t know, and this can be really costly when it comes to property purchases.
To summarise, think about the timing of your offer and have alternative properties up your sleeve. Be as prepared as can be and consider seeking professional advice. And brings us to the end of our very special negotiation series.
So to refresh your memory on the 11 key pieces of negotiation advice that we’ve discussed in recent weeks, start by changing your outlook, build good rapport with those that you’re negotiating with by using, mirroring and labelling techniques. Be aware of your relative perceived power position, particularly when you may feel that things are actually tipped against you. Remember that in all negotiations, cash is still king. Make sure you know the prevailing market conditions. Remind yourself that every negotiation starts with ‘hello.’ Know when to deploy the knockout offer, differentiate and broaden your offer by remembering that negotiation is not just about price and that everything is up for grabs when it comes to negotiation. And finally have alternatives and engage professional help in the form of a property strategist, savvy mortgage broker, and most importantly, a buyer’s agent. Now that wraps up our special negotiation series, so I hope you’ve do your negotiation armoury so that you’re fully prepared to successfully negotiate your next property purchase or indeed negotiate better on any transaction in the future.
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