In this blog last week, I shared with you some of the challenges that online data companies create when they provide information about what a property might be worth…and how these companies can destroy the owners’ ability to achieve a top price if the data is inaccurate.

I also shared how you (a property owner) can take steps to address this issue before your property hits the market.

I cannot emphasize how important this step is in the sales process.

We tell many sellers about this when we list their properties for sale and many of them don’t take appropriate action…only to regret that they didn’t take action when a buyer uses this data as a reason to justify their low offer.

In my opinion, the ability of an agent to negotiate with a buyer is a lost art in real estate sales and I honestly feel that too many agents spend way too much time trying to bring sellers down to the amount that buyers are offering, rather than spending the time to bring the buyers up to the mark that sellers are seeking.

You’ve heard the old saying “A Property is only worth what someone is prepared to pay for it” but I believe the saying should really be… 

“A Property is worth what someone is prepared to pay for it and what someone is prepared to pay for it can be influenced by a highly skilled real estate agent”. 

Real estate values are always debatable, and value is always open to opinion.

I believe that some real estate agents (even some that are ethical and intend to do the right thing for their sellers) make the mistake in a negotiation of trying to work a buyer up to a seller’s price without any great justification of the price – their sole point of negotiation is… “Well this is the figure that the sellers want to achieve”.

The bottom line is that any buyer doesn’t really care what figure a seller wants to achieve if they have an underlying belief that the seller’s expectation is higher than fair market value.

You’ll never hear a buyer say, “Certainly Michael…I’d be happy to pay the sellers an extra $40,000 for their home if they really want those new jet-skis despite the fact that I think I’ve already offered them fair market value”. 

One of the ways an agent earns their commission (and can demonstrate that they’re worth far more than the commission that you pay them) is in the way that they influence what the buyers consider to be ‘Fair Market Value’ of a particular property.

When we negotiate, we often don’t even discuss the figure that the owners are chasing until the buyer’s mindset of what’s ‘Fair Market Value’ is in line with our seller.

After all, what’s the point?

I don’t care how deeply a buyer may have fallen in love with a property – they aren’t going to pay the money required if their belief system about value is altered.

So, when we negotiate, we’ll often spend the vast majority of our time in friendly debate with a buyer about their offer and how they came to offer such a figure.

We normally spend considerable time analysing recent sales, making comparisons and working to show the buyers that they aren’t paying too much for a particular property.

If you’ve been reading my blogs for some time, you might remember me saying that the driving question most buyers ask themselves when they have their heart set on a property is…”Am I paying too much?”

An agent needs to provide ample reasons to show them they aren’t paying too much if they’re heading towards paying the right price.

It’s why we call this process a ‘Re-education’ of the data the buyers utilise.

There’s no surprise that the buyers tend to look at the data through their own ‘buyer-orientated’ eyes and they tend to shy away from sales that might be higher.

They’ll put down the higher sales to “A lucky sale” or “The buyers were probably from Sydney and didn’t know what they were doing”.

These same buyers acknowledge that the lower sales figures might be because a seller needed to sell quickly, or that the agent under-marketed or under-appraised the home…or that the agent didn’t have the skills that we’re talking about right here…and they just took a half-baked offer and shoved it down the throat of their sellers.

Next week, I’ll share a few examples of how an agent can dramatically influence the price that a buyer is prepared to pay.

Until then…Happy Listing and Happy Selling.