When the topic of property negotiation comes up, there are basically 2 types of people. One type gets chills when they have to sit down and bargain. The other type is convinced that they are the biggest dealers around and can’t wait to jump into action. My experience is that whether it is one or the other, the vast majority still fail the negotiation.

In this article, I will share 3 steps with you, which I consider to be the most important and which you can use to maximize the benefit achieved during price negotiations.

HOW CAN YOU EARN MONEY DURING A PROPERTY NEGOTIATION?

During the property price negotiation, as in most negotiation situations, you should basically strive for a win-win outcome. This is the situation where both the buyer and the seller feel that they have made a good deal. For example: the buyer would have been willing to pay more for your apartment than you finally agreed on. From the other perspective: The seller would have been willing to let more off the price. Actually, there isn’t a problem unless the other party finds out that they could have done a better deal.

WHAT IS THE HOURLY WAGE OF A PROFESSIONAL NEGOTIATOR DURING A PROPERTY NEGOTIATION?

In order to understand the benefits of a professional negotiator, let’s see their hourly wage. The fact is, that they can possible earn fairly good „salary”. Look at this example:

Let’s say you would like to sell your apartment for £243,500. You consider with a possible discount, so you would sell it for £235,000.

Here comes the buyer and offers £235,000.

You have two options here:

1. You start cheering, immediately accept the offer and run to the lawyer.
2. Or you can sit down for further negotiation with the buyer.

Let’s assume that you could push the price up to £240,000 during an hour long negotiation.

What happened? You earned £5000£ in one hour. Tell me another profession where you can operate with such hourly rates. The list won’t be long.

You’re better off not accepting the first offer!

If, upon hearing the £240,000 offer, you immediately shake hands with the buyer, you may be making a big mistake and the sale of the property will go down the drain.

Think about what is going on in the buyer’s mind?

• hmmm. I could have bargained more…
• or in a more serious case, “he looks like as though he wants to get rid of the apartment. There is something wrong here…

On the other hand, by making the buyer curious and forcing them to think about it once more, in addition to earning £3,500, you also prevent them from feeling that they could have done better during the property price negotiation. They will feel good about the price of £243,500, since they negotiated it.

WHY IS IT POSSIBLE THAT DESPITE OF THIS, SELLERS CAN’T NEGOTIATE WELL DURING PROPERTY SALES?

1.     Emotional part of property negotiation

The The previous example looks very easy and comfortable.

But in general, people only find the negotiation easy until there are considerable amounts involved. E.g.: If the topic is one kilogram of potatoes, let’s say for £ 1, or a phone for £ 200. But the property price negotiation is not about an everyday amount.

The situation is completely different when a person negotiates about the fate of his biggest asset, £200-500-700 thousand, which he built with his own hands, or it is the result of his family’s hard work. Not to mention that this is often not just a mathematical question. Maybe this property transaction will determine the next 20 years or the whole remaining life of that person.

In addition to the large sum, the following issues complicate the situation:

• If I sell my apartment, where will I live?
• How much time should they spend with the renovations?
• How much mortgage must be taken?
• How will they repay it?
• What kind of neighbours will they have?
• Will they like living there?
• Is my investment going to pay off?

The truth is that all of this could be a bit mind boggling. Because of this, personal attachment and emotions might develop in the sellers, and among other things, this might cause the overpricing. And of course, if someone happens to not speak in “superlative terms” about the property for sale, they become the enemy immediately.

2.     Lack of preparation

When a seller decides to sell the property, how do they usually start?

They post an advertisement and that’s all.

And the buyer? Won’t they have questions? Do they just come and happily pay the requested amount and that’s it?

Not at all. The buyer will have millions of questions. E.g.:

• What about the property sheet?
• Want to see the founding deed of the apartment building ?
• Is the electrical wire made of copper?
• Why is there a crack on the wall?
• What is the proportion of municipal apartments in the building?
• What conversion options are there?
• What are the rules regarding land development?
• What development plans are there in the area?

and so on.

The “average” seller, on the other hand, has no idea what is on property docs, has no idea what the land registry document is and why it should be looked at, but most people have no idea what kind of wires run in the wall and why it is important.

Now it’s quite difficult to negotiate and ask for a high price when we don’t have a faint idea of ​​what we’re selling. So I suggest that before you drop everything and rush to post an advertisement, it’s better to prepare a little bit. Firstly, when the buyer asks, don’t just stand there and look dumb, but have the answers. On the other hand, if you find issues, repair them before you put the product on the market.

3.     Incorrect assessment of the bargaining position

Imagine the situation, where you sit at the negotiation table, you are completely calm and confident because you know that it doesn’t matter what the other person says, if they want to make a deal with you, they will end up dancing to your tune. In short, we can say: You are in control. Like the woman in the picture below:

This is what I call being in the position of power.

Sellers usually make the mistake, when they think that they control the situation. However, in the instance of resale residential properties, this is most often not the case.

How do you know that you are in the position of power?

• If the market is heated up, which means that there are more buyers than sellers, and prices go up.
• You are selling in a sought-after area.
• Your category is mostly searched.
• If you sell something rare and unique.
• Your apartment is free of legal and technical problems.
• Aesthetically immaculate.
• The price you set is marketable.
• Continuous, 3-4 interested parties per week.
• It has been on the market for a maximum of 1-2 months.
• And of course you know that the buyer fell in love with the apartment.

In comparison, let’s see what the situation looks like for an “average” seller:

• They have no idea that the market has cycles
• In addition, there is a property boundary dispute with the neighbour
• „Not a single nail has been hammered in for 25 years, the buyer will refurbish it if he wants”
• And of course, we won’t negotiate on the price!

Of course, I exaggerated a bit again to demonstrate such a case, but I think you get it now. What chances do you think our subject has for the transaction? They give themselves 6-8 months of trying, until they finally get overwhelmed and don’t chase after the best offer anymore… just want someone who makes an offer. And this is not exactly a position of power.

SO LET’S SUM UP WHAT THE SUCCESS OF A property BARGAIN DEPENDS ON

• You probably can’t fully deny the emotional side of the sale, because as an owner, you will have some kind of personal attachment in some way. (I speak from experience) But at least you should know that there is such a thing like personal connection.
• Be prepared, know the product you are selling
• Know your negotiating position. If you are not in a position of strength, you can still try to bluff. But know what you’re risking. If this is the first buyer who is interested in your property in 6 months, then it is better not to play tricks.

Unfortunately, the above did not make you a professional price negotiator, but I believe that if you know this little package of information, you will be more prepared than 90% of sellers.