A recent dealing with a buyer we met several months ago got me thinking about how buyers typically approach negotiations when buying property. Most are tempted to eagerly point out the property’s apparent – and often obvious – faults. Buyers often “talk down” its benefits and highlight its shortcomings in an apparent precursor to justify a lower-than-reasonable offer to purchase.
Pointing out a property’s faults or highlighting what changes need to be made to the agent achieves little other than to alert the agent of a genuine interest to buy because it is such a common buyer trait.
Similarly, buyers armed with computer-generated “valuations” attempt to challenge a property’s asking price predicated on their obviously fallible market opinion determined by an algorithm.
This is all perfectly normal of course but, importantly, such a buying strategy can be disadvantageous because it risks offending the seller. The agent will directly convey any negative feed-back to their client (such as their decor choices) and sellers like to sell to people they like, not those that pour scorn over their much-loved home.
Our buyer wrote a lengthy letter to our seller, going into great detail as to why they ought to accept their below-market offer. The seller was most displeased and rejected their offer and went so far as to proclaim, “We’re not selling to them!” Ultimately, another buyer came along and paid fair market price with the original buyer bemoaning why they weren’t given a further opportunity.
Taking a defensive, argumentative position about the price or presentation of a property gives you no advantage as a buyer at all, irrespective of the market conditions.
It is only at the point of negotiating the sale that a buyer should reveal their price and conditions. A positive, constructive, outcomes-focused approach with the agent gives the buyer a far greater chance at securing the property from a seller sympathetic to someone who loves it but can’t really afford it compared to a buyer who is able to afford it but is stuck on a price because of an inaccurate RP Data report.
Buying and selling real estate is rarely just about the sale price. Sellers have a genuine and emotional attachment to their properties and are often so dismayed at the level of criticism of their property from a potential buyer they will stubbornly refuse to deal reasonably on an offer where otherwise it may well have been acceptable.
By Hayden Groves
These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Australia.
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