Although market conditions will almost invariably be the most significant factor in determining the selling price of a property, negotiation skills can sometimes be an equally important variable; whether you're a vendor or purchaser, with strong negotiation skills, you can bargain for outcomes favourable to your interests.
With that being said, I've decided to share my top 10 tips for negotiating on selling price:
1. Research, research, research: before making any offer on price, research and inspect as many houses on the market as possible. To this end, you should consider working with a real estate agent and utilising sources such as RP Data to inform yourself about median house prices, market trends and capital growth prospects within your area. Knowledge of such will empower you to be smarter and more confident during negotiations.
2. Try to start your negotiations from a position of strength: at the beginning of any negotiation you should aim to extract more from the other party than what you expect to get; while you may not always achieve your aim, you will give yourself the best chance of negotiating towards your preferred price.
3. Know when to stop talking and start listening; this will allow you to process crucial information, adapt your strategy if necessary, and identify prospective bargaining points as they arise.
4. Be considerate of the other party's needs and wants: try to stick to areas where compromise is possible in order to ensure that discussions remain constructive; as soon as negotiations become destructive, the chances of a favourable outcome for either party become considerably reduced.
5. Make sure that you detail your position with clarity and precision: try to speak at an even pace and pause between sentences to ensure that the other party can properly understand and process what you are saying.
6. Know when to step away from a negotiation; when differences become irreconcilable, recognise the fact and revisit discussions at a later point in time.
7. Leave your emotions at the door: it is important to stay composed and rational throughout the negotiation process so that you remain in control proceedings and clearly evaluate offers and potential outcomes.
8. Know your limits: the purchase or sale of a property can be a highly emotional experience, which can increase the potential for impulse decision making. As such, it is important to know your walk-away price from the start of the negotiation process and to stick to such.
9. Set deadlines: If you make an offer it is important to create some pressure for acceptance. Give the other party a reasonable deadline to contemplate the offer and let them know that you will be speaking to other parties during that time period.
10. Utilise the services of an experienced real estate agent: much like most people wouldn't go into court without a lawyer, most parties shouldn't enter into property negotiations without a real estate agent by their side; real estate agents can not only help clients make properly informed choices during their negotiations, but they can also be extremely helpful in developing negotiation strategies and providing emotional support.
For more information on investment opportunities in your area, please contact your local Century 21 Real Estate Agents.