In my blog last week, I discussed how agents fall into one of three categories when negotiating a deal…

  1. Agent Number One takes an offer and does their best to pressurise the seller into taking it no matter how good or bad the offer actually is.
  2. Agent Number 2 takes an offer and puts the works on both parties to secure a deal, irrespective of the offer. This sort of agent puts their own needs first and does whatever necessary to secure a deal.
  3. Agent Number 3 takes an offer and works their butt off to secure the highest possible price for their seller.

 

As a seller, you’re obviously looking to employ ‘Agent Number 3’ and from here, I’ve found through experience that there’s three main principles an agent must demonstrate in order to move a buyer forward and have them increase their offer.

You can talk until you’re ‘black and blue in the face’ (as the saying goes), but a buyer won’t increase their offer unless they feel comfortable to do so.

Remember the buyer’s primary driving question is “Am I offering too much for this property?”

So, last week we discussed the first point in which I detailed how an agent must understand how to create strong demand for a property. This is the first crucial step and I believe that every buyer (whether consciously or subconsciously) analyses the competition and addresses their initial offer to reflect this.

Today, here’s the next principle and procedure that an agent must implement in order to move a buyer forwards…

 

  1. Proof of Value – Simply telling a buyer that they’ll need to increase their offer is just not enough…the buyer must be comfortable that they are paying a figure that is within reason. I believe that a good agent has excellent knowledge of recent sales and knows how to demonstrate value to any buyer through the facts of what’s sold in the area. We use any data that can honestly extrapolate to show value – sometimes, it might be Council Land Value and replacement cost of dwelling, other times it could be the size of the property and the rate per square metre of the home compared to other homes sold in the area, sometimes it is simply another sale in the street and the capital growth figures of how the suburb has performed in the previous 6-12 months, other times it might be what another home has fetched in a neighbouring suburb and we’ll use comparative distance from the CBD to negate any perceived disparity in median house prices. Whatever it takes, we’ll find an angle! I remember negotiating a deal around five years ago on a home that was previously listed with another agent and the buyer obtained an offer of $880,000 with this agent. The owner and the agent had a disagreement based upon the fact that the agent was quite aggressively trying to have the owner accept this offer…an offer that was $40,000 short of what they were looking for. I listed the property and the same buyer came back and made the same offer of $880,000. I spent considerable time negotiating with the buyer and eventually, they paid $920,000 which was the owners’ target figure. When I spoke to the buyer at settlement, I asked them why they lifted their offer with me and didn’t increase it with the other agent, Their answer was simple… ”Michael, you showed us why we weren’t paying too much for the property at $920,000. The other agent never really tried to get us to increase our offer with any real conviction and quite obviously, we knew the other agent was working to get the sellers down so we thought that in this agent’s opinion, we must have been paying a fair price.”

On another note, nothing would be sweeter than to wipe the smiles off the faces of every New South Welshman tonight in Origin 2. They’ve won one game and have already started talking up a dynasty. One good game doesn’t define a decade I would think. Time will tell! Good luck tonight to the mighty Maroons.

 

Until next week, Happy Listing & Happy Selling.

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In my blog last week, I discussed how agents fall into one of three categories when negotiating a deal…