The Art (& Often Missed Opportunity) of Negotiation

Potential sellers often fail to grasp negotiation and underestimate it in the mix, which sees them selling for less.

Most of us are used to products having prices on them and, when it comes to real estate, we think or are told that the market (an invisible levelling force) will decide the price.

BUT in reality there’s so much you can do as a seller in any market to sell for more, protect your price, or sell more quickly. In real estate, the ‘3P’s’ – Presentation, Promotion & Price – are critical.

We’ve been around real estate for a while now – 17 years and over 500 homes sold. More uniquely we’ve been renovators and vendors 4 times in the last 3 years as we sold up our rental properties.

Our Vendor Diaries Series shares all the real, tested and practical insights from our recent experience as vendors to help you. If you’re just joining, check out the first 7 articles below. Packed with pro-tips and hacks, there’s gold in here for you:

1. Getting Real Results Outside

2. Getting the House Exterior in Shape

3. Getting the Inside Sorted

4. Inside Touches and Styling

5. Marketing a House for Sale

6. Gather & Share Information

7. The Two Things That Sabotage a Good Sale

This article deals with negotiation, ensuring you don’t leave money on the table and make the right trade-offs:

Prices NOT Price

There’s a multiverse of prices your property could achieve within a range, which is surprisingly wide. Thinking in ‘prices’, and not ‘a price’, helps to grasp that certain things can get you one price over another or in one part of the range than another. One of our properties had an online estimate with a $95,000 price range, from a website buyers commonly look to. We sold it for $55,000 more than the on-line estimate and the price was $15,000 above the top of the estimate range. A lot of inputs led up to this (see the articles) and the final negotiation itself put another $20,000 on what had already been a lot of movement.

Package & Possibilities

Offers have different components – there’s the dollars, whether an offer is clean (cash/unconditional) or comes with conditions, what any conditions are and how long you’d have to wait to be sold, the relative riskiness of different offers when compared, the settlement timeframe, and sometimes other extras – a buyer might ask for something to be included or taken care of, or you might be offering a sweetener to get the deal over the line. One of our properties had 12 offers - 10 different prices and 12 different conditions versus unconditional (and settlement date) packages. Through skilled negotiations we maximised the price and minimised the risk to ourselves as vendors, getting to a higher cash offer and avoiding unnecessary risks. Navigating this and understanding and making the right trade-offs was vital.

Pitfalls

The clue is in the term - falling into pits is bad for your sale. Higher standard negotiators have already worked out the potential issues and solutions before anyone else is even aware there are any. They’re thinking several steps ahead, so are rarely surprised, are highly knowledgeable and can problem solve creatively. They’re able to connect with different sorts of people and understand their concerns, and can raise things and communicate in a way to build trust, sort tricky problems, and put people at ease to keep a sale on track. Going through the details of LIMs, Titles, and Building Reports is part of this, out-of-the-box thinking and proactive solutions is another, as is being able to engender confidence and comfort. If you don’t have this level of support it’s a crap shoot as to what will happen if problems arise. A prospective sale can turn into a no sale or a great price can evaporate.

Professional Negotiator

Picking your representative is the biggest and most important decision - get that right and the rest just takes care of itself including the fees, which should pay for themselves in the better result and support (or at-least any fee difference). Remember, as a vendor you don’t pay any fees unless you actually sell and you won’t know the price you’re taking the fees off until the end when it’s in front of you. In what is a negotiation business at its heart, some vendors are ironically drawn toward representatives with low fees or who lower fees under pressure – replace the word ‘fees’ with your ‘house price’ and you’ll hear the clank sound…it’s the penny dropping. Shop for a higher standard of negotiator…period.

Why does this matter? Each property sold for a good price and in a good timeframe so we could get on with our plans, and in a market that was not a cake walk like it was before.

With Spring just around the corner now is the perfect time to get good advice and start preparations. Call or email us on 027 518 0008 or leonie.snook@harcourts.co.nz for a no-obligation chat.

No fuss, no sales pitch, no juniors, just service!

Previously: Entry 7: The Two Things That Sabotage a Good Sale · The full series: All entries

Selling in Wellington? We've been doing this for 17 years across Karori, Paparangi, Wilton, Khandallah, Johnsonville, Crofton Downs, Newlands, Ngaio, Woodridge, Wadestown, Grenada Village, Churton Park and everywhere in between. No junior agents, no fuss. Find out what your home's worth or call us on 027 518 0008.