Is there a 'magic formula' for negotiating on properties?
Property investors often have a hard time negotiating on properties—buyers want the cheapest price while sellers want the best price—but Charles Tarbey, chairman of one of Australia’s largest real estate networks, believes that it only comes down to a good understanding between the parties involved.
While the price of a property is dependent on many factors based on market cycles, a good real estate agent negotiating on behalf of a buyer or a seller will also factor in the personal motivation and the current position of their client.
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“I think it always comes down to the motivation of the seller, [and] the position the seller is in. If you can find out what the position the seller is in… [and] you’re able to provide a reasonable and fair offer that meets the terms that the seller has [and his circumstance]... you’re going to have a far better chance to negotiate your position than somebody else,” Charles explained.
Being able to determine the position of one of the parties will make it easier for the other to work around the expectations set and ultimately make the transaction smoother for everyone. However, an agent will not always divulge personal information about their clients.
What’s the “magic formula,” then? Just ask nicely.
“The agent can’t give you too much information. That’s going to breach confidentiality,” according to Charles.
“But if the agent is talking to a buyer and the buyer says, ‘I’m in a position to buy. What’s the seller’s needs? Would you mind asking?’ [the agent] can go back to the seller and say, ‘Look, the buyer is requesting what you need. You and I both know you’re being transferred. Don’t you want me to tell [the buyer] that if they meet a certain time frame, you’ll take this offer?’ I think that’s how you can do it.”
At the end of the day, negotiation is all about the buyer and the seller finding a common ground by matching each other’s needs and requirements.
“The best real estate practitioners are the ones who are trained to communicate a message, the ones who are trained to build a relationship with both parties and ensure that they understand the needs of the buyers and sellers and they match those needs,” Charles concluded.
Tune in to Charles Tarbey’s episode on The Smart Property Investment Show to know more about the secrets to negotiating with real estate agents to secure the best outcome for your property portfolio, as well as how property investors can work more effectively with real estate agents and sellers.
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