A win win approach to property negotiation
No moment of buying or selling a house feels more nerve wracking than that final price negotiation.
It’s you verse the buyer/seller as you scrap it out in a bloody battle for the best deal. Until, finally, one of you emerges victorious.
But here’s the thing… it doesn’t have to be this way.
A common misconception about negotiation is that they are adversarial by nature, that there’s a winner and a loser and that playing hardball is the best tactic. But there is another, better, way: the win-win approach.
Not only is a win-win approach to buying or selling a home possible, but it also leads to a less stressful, more positive experience for everyone involved.
Price is not the only negotiation point
The key to win-win negotiating is understanding that value comes in more forms than just money. This is where finding common ground and compromise comes in.
See, there are a number of concessions that both parties can make—many of which have significant value. By putting a monetary value on these, you can keep them in mind when negotiating the final sale prices.
• Settlement period: While the most common settlement periods are 42 and 60 days, the length of time for settlement is not fixed and can be negotiated. Settlements can be as short as two weeks and can run longer depending on the desires of both parties.
• Subject to prior sale: When the buyer requires the cash from the sale of their current house to purchase the new house. If a vendor has multiple offers, they are unlikely to accept this condition unless your offer is exceptional. Even then they will take the advice of a professional to ensure your home will sell for the expected amount in a reasonable time frame.
• Paying cash vs. subject to finance: If you are able to pay cash up front, you may be able to use that to your benefit in negotiation.
• Repairs: These cost money. Consider their value when negotiating the house price. If you can’t get the seller to budge on sale price, see if they’ll include any repairs that need doing.
• Fixtures and appliances: If you’re a vendor and you don’t want to lower your sale price in a negotiation consider including some of the fixtures and appliances in the sale. If you’re a buyer and you really want that above-ground pool, bargain for it. Sales of luxury homes often include the artwork within.
• Tenancy: Sometimes a vendor needs to sell for financial reasons but doesn’t want to move. The agent isn’t going to tell you that, but if part of your offer is to keep the vendors on as tenants if needed you may strike gold. Particularly if you’re after an investment property.
• Who pays what: There are a numerous fees and taxes involved with purchasing a home, everything from stamp duty to pest inspection costs. Whether the vendor or buyer pays these is something worth discussing.
• Other special conditions to consider: Deposit size & instalments, subject to council approval for pools, extensions etc., subject to finance at a specified rate etc.
Work out what the other party really wants
In order to strike the best deal for you both, it’s imperative to find out as much as possible about what sort of negotiations will appeal to the vendors. The agent isn’t about to spill personal details about their client, but their job is to get the best deal for the vendor, and that may be more than just cash.
Your best chance of reaching a win-win situation is to work closely with the agent representing the property. They know the needs of their clients and are savvy enough to be able to negotiate settlements that get the best deal for the vendor, but also leave the buyer feeling great.
So next time you’re looking to buy or sell property, leave the battle axe at home and you may just find the process a whole lot more enjoyable.