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The Art of Negociation

General Angela Calla 23 Mar

With a busy spring market, I found this article of interest.

The delicate art of negotiation

When Jody bought his condo, he beat out a competing offer that was $10,000 higher. How? A little strategic psychology and the real estate system!




Jody W  is one happy man. Just before the holidays this renter became the proud owner of his first condo. The amazing thing is that he nabbed it with a bid that was $10,000 less than the nearest competing offer. As a first-time home buyer, Jody chalks his win up to a great real estate agent who really understands the power of negotiation. Turns out there’s an art to buying property as well as a science. And as Jody discovered, using a little psychology when you’re sitting across the table from the seller can pay off with a winning bid that’s thousands less.

Know more than the other sideWhen you’re buying a house, knowledge is power. Ask any successful home buyer and they’ll tell you that the key to a successful negotiation is to walk into the room fully prepared. In particular, you should find out how close the property in question is to public transportation and major roads. Look at the taxes and neighbourhood crime rates. Consider the quality and proximity of schools, community centres and stores. All of these factors can have a big impact on how much a house is worth. ” Location should always be first on the list of determing values” says Boies.

Most importantly, though, get to know the sale price histories of similar homes in the area. That way, if you think the price of the home you want to buy is too high, you could point out, for instance, that an almost identical house down the street just sold for $20,000 less and it has a second bathroom. Use this to negotiate a lower price.

Don’t stop thereRob Boies, the creator of the real estate system says the next step is to keep researching until you find out why a person is selling. He says the easiest way to get this is to casually ask the seller directly during an open house (don’t make it feel like an interrogation). If the seller isn’t accessible, do a little digging. “Ask neighbours or the local homeowner’s association/ strata,” Rob suggests. Explain that you’re interested in buying and you want to get a feel for the area. Once you’ve chatted for a bit, spring the question. “Nine out of 10 times you’ll find out the reason.” As a buyer, always use the services of an agent as the two agents can discuss certain motivating factors that can not be shared when the buyer has no agency and therefor the sellers agent is in a ” Limited Dual Agency”; Limited to the information he can give you regarding his sellers motivation, plus the buyers agent services are free! to you.

Once you have that information, you’ll have a big leg up in the negotiation. You can focus on what’s important to the sellers, and that gets you closer to a deal. If you know that the sellers have already bought a new house—conditional on the sale of the house that you’re looking at—you can push them harder on the price. On the other hand, if they’re just testing the waters, you might not want to haggle too much.

Chattel chatterWhat if you’ve done your research, made your offer, and there’s still a chasm between your offer and what the seller wants? Does that mean a deal can’t be reached? “Absolutely not,” says Boies. “Because in real estate, everything has value—which makes everything negotiable.” As a buyer, you can use personal items as a way to bridge the gap. For instance, if the seller won’t settle for less than $350,000 and you think the home is worth $340,000, then add your own incentive. Agree to the seller’s price, but only if they throw in some furniture, or bar fridge, or patio furniture, As a WillingSeller any item maybe included in the deal .

The key, says Boies, is not to get too attached to individual items, or you could sink the deal. For instance, while negotiating the purchase of a Vancouver home last year, Rob ran into a snag when the buyer and seller began to argue over the possession of a built-in cappuccino maker. “I couldn’t believe a $500 appliance threatened to derail the sale of a $1.5 million home.” The deal didn’t fall through immediately, but Rob is convinced that bad blood from the cappuccino tiff tainted the sale. The buyers eventually walked and the sellers couldn’t sell until months later—for $100,000 less than the original offer.

Focus on the deal, not the dollarOf all the advice on successful negotiating, probably the most important is that you’ve got to draw out the sellers’ motivation so you can make them feel like a winner. That’s what enabled Jody to get his condo, despite his lower bid.

Our agent knew the condo would sell quickly, so rather than faxing in the offer, he showed up in person, plus we utilized the “QuickStike” method which is a tool developed within the system. By doing so, he was able to tease out the motivation behind the sale: the sellers had recently become proud new parents and needed more space. A quick phone call, and half an hour later Jody was sitting at the negotiating table. That’s when our realtor stopped trying to buy the condo—and began trying to sell the motivating factors within the deal.

The strategy worked. The sellers formed an emotional connection with the buyer, and they could picture him enjoying the condo they loved just as much as they had. In other words, both parties walked away feeling good, feeling like a winner. And that’s worth a lot more than you’d think.

I’m never to busy to assist you or those you care about, call me anytime to achieve your real estate goals and dreams; Rob Boies 604 341 3009