Greed is a powerful motivator. Lack of knowledge normally leads to bad decisions. The combination of the two normally leads to expensive mistakes. You can use this to your advantage.
I recently wrote about a house in Notting Hill I had just acquired for some clients. The seller had previously rejected an offer that was hundreds of thousands of pounds higher. But he accepted our offer only a matter of weeks later.
I also acquired an apartment in Knightsbridge for another client at a considerable discount to the asking price. This was despite having been told that such a discount was unlikely to be agreed.
Now I would like to exclusively reveal the secret negotiating strategies that I used; the clever wording, the subtle insinuations and psychological tricks that I employ to compel sellers to accept low offers. Except fortunately negotiations do not work like this. In these instances a far simpler strategy was at work – research.
Admittedly this is not as exciting as pretending that I used hypnosis or neuro-linguistic programming to bend people to my will (and believe me this can be done. You only have to watch Paul McKenna in action.) However, I know very little about NLP and research is simpler if more boring. Nevertheless it is EFFECTIVE.
So what research did I do for each property?
- Firstly I ignored the price and worked out what I felt represented fair value. Admittedly this is relatively easy considering I have seen over 20,000 properties over the years.
- I discovered how many people were looking for this type of house and flat.
- I found out how many people had viewed them.
- I discovered what offers had been made and rejected.
- The agent let slip important facts about the seller over the course of negotiations.
The key point is that what I did was nothing mysterious. Information will give you the edge, so you have to keep asking questions throughout the negotiation. One tiny piece of information (often mentioned in a throw away line) can be worth hundreds of thousands of pounds. With regards to the flat in Knightsbridge, the pivotal piece of information was that I found out that the sellers were disposing of their investment for tax purposes.
Therefore I knew that they were under some time pressure and would accept a lower price than any other buyer had realised. Consequently we bought a fantastic property while our competitors, i.e. other buyers in the market, were getting involved in a sealed bid on a far inferior property.
There are a number of points you can take from this, but they key one is that negotiation skills are not a “gift” that only a few people have. Yes it takes practice and the confidence to make “low” offers. You also need to know how to increase your offers, how to position yourself, how to judge the sellers and their agents. You need to know how to value properties and to know the key questions to ask at any point in the negotiation. You need to know when to walk away and you need to know how to frame your offer to make it easy for the sellers to accept. Indeed the subject is huge and can be complex.
But you do not need to have been born with a sixth sense for negotiation. You can learn how to do this. It just takes a bit of time, dedication and practice.
Of course, time is not necessarily something of which you have a surplus. Indeed if you are like many of my clients, you are probably exceptionally busy. Therefore if you want to reduce the wasted time and stress endured by the vast majority of buyers, then you should get in contact and find out how we can help you.