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Negotiation

When you receive an offer, you have three options: accept the offer, reject the offer, or counter the offer.

Some common questions and aspects that buyers will use in negotiation are below. Think about each of these questions and have an answer ready

Why are you selling?

Most buyers will ask why you are selling your property. Generally a buyer will be asking so that they can have peace of mind as to why you are selling. However, they may be asking to gather negotiation ammunition (i.e. gauging how desperate you may be to sell).

What is your asking price?

Buyers who are viewing your property will more than likely have researched other property sale prices in your area. If your property is priced a little higher than others in your area, be prepared to justify this decision. Remember that if you have purchased a package through Trade Places, then you will have your current valuation on hand to refer to in negotiations. This may be useful if justifying your asking price (i.e: our valuation of two weeks ago states the property is worth what we are asking). Remember that in a sellers market it is feasible to price your home slightly above your valuation. In a buyers market be prepared to set your asking price at the valuation and prepare a list of all the features and benefits of your house to back your price up. If you dont have a current valuation, remember you can purchase one at anytime simply by visiting Trade Places Service Centre.

Dropping your price

Make sure you pre-determine your absolute lowest price so you can be clear over which offers you negotiate on and which you walk away from. Never disclose to a buyer what your bottom price is.

Level of interest surrounding your property

A potential buyer may ask you what level of interest, and the number of offers you have received on your property. This is normally to determine the level of urgency and competitiveness surrounding your property.

What is the Settlement period?

A common question during the selling process is what will the settlement period be? This period generally ranges from 30 to 90 days and is at your discretion to determine. If a buyer is offering slightly less money for your house, but are cash buyers (i.e. do not have to sell a house to be able to go unconditional on yours), then you may be able to settle in a relatively short time-frame. This may be advantageous to you if you already have an offer on, or want to make an offer on another property.

Don't rush in

Remember to TAKE YOUR TIME. If a buyer is offering a certain price for your property and you are unsure whether you want to take the offer, dont feel pressured into answering on the spot. Remember that you don\'t have to answer a question or make a decision on anything straight away. You can always say I\'ll have to discuss that with my partner, co-owner, lawyer, etc and come back to you. This enables you to make a considered decision and answer appropriately.

Conditional vs Unconditional offers

A conditional offer means that the buyer has certain conditions that need to be met before they will legally commit to buying your property. (common conditions include: builders report on your property to make sure it\'s sound; finance to ensure the bank will loan them the amount they require; Land Information Memorandum Report (LIM report) which is obtained from the Council and outlines everything to do with the land your property sits on; Title Search to ensure there are no Caveats or restrictions on the property; subject to the sale of their home. The first four conditions are pretty standard and can be fulfilled within 5, 10 working days. The sale of a home is the least ideal as there is no set timeframe for this and you could be waiting for months for the buyer to filfull your contract. Normally a seller will stipulate that they will accept a condition of house sale in a contract only with a cash out clause (i.e. another buyer can put an offer in and the original buyers have 3 working days to either go unconditional or pull out of the sale). Obviously, for the sellers perspective, the less conditions the better! Ask your lawyer to look over any conditions that you are unsure on.


Not accepting an offer

Do not feel obliged to accept an offer if it is less than what you want. Simply advise the buyer politely that the offer is below what you need and that they are welcome to put forward another offer. If they do not wish to do so, ask them to contact you if they change their mind. Be prepared to walk away from an offer if it is less than your bottom price, if the buyer likes your property enough, they will come back to you with a higher offer.


Be prepared to compromise

Respect the Buyers Important Issues. You may be able to strengthen your own positioning by knowing and respecting items of particular importance to the buyer. If you try to win every point, you could sour the deal. Both parties should walk away relatively satisfied with the final terms. Also try and put minor issues aside. If you cannot agree on minor issues, put them aside and complete the main agreement. With the main agreement completed, you\'ll find minor issues are far easier to settle.


Finally,

  • If you have multiple parties wanting to make an offer, let all parties know that you are receiving best and final offers by a set day and time.

  • Make sure all offers are in writing.

  • Remember that once an offer or counteroffer is accepted, the agreement becomes a legally binding contract.

  • If a buyer says something negative about your property, don\'t take it personally, it is just a form of negotiation! Avoid letting your feelings overrule good judgment.