Understanding the property negotiation process

Skilful negotiation is critical if you want to achieve the best possible result in the sale of your property.  Fortunately, with a professional REIWA real estate agent on your side, you can be assured of the highest possible expertise in the negotiation process, skills that are regularly practised and mastered.

As REIWA agents, we are well-versed in the art of property negotiation, and will guide you through the process to ensure the best possible outcome.  

Given the fast-paced market we are currently experiencing in WA, multiple offers are not uncommon, and it is vital that you know how these are handled. While your natural instinct may be to go with the highest offer, there are other factors that come into play, which might impact your decision when evaluating an offer for sale. 

1. The amount of the offer

How does the dollar value of the offer compare to the appraised value provided by the agent? Is it an offer you’d consider accepting or would you like to present the buyer with a counter offer? 

2. Is the buyer willing to put down a deposit?

When a buyer is willing to put down a deposit, it is generally a positive sign that they are a serious buyer. Importantly, it also suggests that they have all their finances in order, making for a smoother settlement process. 

3. How are they paying?

While the majority of buyers need assistance from a lending institution, this won’t be the case for everyone, Downsizers are a classic example of those who may be in a position to pay in cash. Cashed up buyers know they have an advantage when making an offer. Some cashed up buyers take advantage of this by making a lower offer in return for a faster sale. If selling quickly is a priority for you, this might impact your decision.

4. Do they want to include any special conditions in the contract?

When presenting you with a formal offer, the buyer has the opportunity to include ‘special conditions’ into their contract that would need to be met for the sale to proceed. Examples of special conditions include a subject to sale of their own home clause, a requirement of a longer settlement or even a requirement of something included in the sale that would not normally be included. It is also fairly standard for buyers to make their offer conditional upon a building and pest inspection report (both of which the buyer will pay for unless you have arranged them in advance). 

How to respond to a buyer offer

It is important to understand that a professional will have negotiated with each buyer making an offer BEFORE that offer is presented to you. A professional negotiator will always ensure that a buyer’s best offer is put forward.

Once you receive an offer, you have three options:

1. Accept the offer 

If you are happy with the offer, including any conditions put forward, you can simply accept the offer without needing to make a counter offer or for any further negotiation. 

2. Counter the offer 

Most sellers do choose to present a counter offer. Presenting a counter offer signals that you are seriously considering the offer but have some reservations, about the price, the conditions or both. Your agent will guide you in this process. You may only need to counter once, or you might go back and forth a couple of times until you reach a mutually agreeable outcome.  

3. Reject the offer 

If the offer doesn’t come close to your expectations, you have the option to simply reject the offer. Doing so may entice the buyer to present a new offer, however, by rejecting the offer without presenting a counter offer, you run the risk of not hearing back from them.

By working closely with your REIWA agent, you can be confident that they will guide you in terms of what is a fair and reasonable offer and outcome for your property.

Ask us about how we negotiate on behalf of a seller. We will even role play it with you if you want to put our skills to the test.

Post by ShelMarkblog 06 Aug 2021 0