When you own a property, you may need to sell it. How do you go about doing that? In today’s show Rachel Barnes, from Investor Friendly Agents, helps you with some negotiation tips.
Kevin: When you own a property, you may need to sell it. How do you go about doing that? A lot of people would think, “I’ll just appoint the agent and the agent will do all the negotiation for me,” but along the way, you’ll have to become a negotiator, as well, because you will end up negotiating with the agent. That is not only to get the sale right; it’s actually to get the appointment of the correct agent, as well.
Rachel Barnes has a website called Investor Friendly Agents working with agents to work better with investors.
Rachel, what are some of the tips you can give us as to how sellers can become better negotiators and work better with agents?
Rachel: I think firstly, you need to be prepared. That is one of the key things. Even before you talk to an agent, you need to have done your homework. Firstly, you need to know what your target market is, because they’re the people that you – either yourself or through the agent – are going to be negotiating with.
If it’s a three-bedroom house and you’re looking at a family, then that is what you’re going to focus on. If it’s a two-bedroom unit, maybe an investor. The more you know about your end buyer, the better you’re going to be in a position to negotiate, because negotiation gets down to building the benefits for the person on the other side of the transaction. That is really what you have to look at.
Kevin: Negotiation is a very important part of the process. We should never be afraid to do it; it’s just part of the process. Therefore, you should just become more skilled at it, Rachel?
Rachel: Absolutely. It’s a bit like you did at school or university, where you actually do some role play. I always suggest that you have somebody who is the devil’s advocate, who is either playing the agent or the potential purchaser, and you going through with them.
What you have to do is give them all the benefits. You have to overcome objections before they even get to that stage so that by the time you’ve talked to them, they have nothing that they need to know about, they can make a decision – yes or no – to your property. Being prepared with role play and having the confidence to do that, I think, is the key thing for you.
Kevin: The next step?
Rachel: The next thing I would say would be making sure that you know exactly what you’re looking for. When I talk to agents, the things that I [2:01 inaudible] is you’re dealing with a buyer or seller.
Remember that it’s not just price that counts. If I’m looking to sell a property, it’s not just the price I’m looking at; I’m also going to consider the conditions that I might be willing to accept. There might be a really good price if I’m going to be having a quick, unconditional sale.
But on the other side, if somebody wants to have some conditions in there – like they want to get in there to renovate, or they want to have a longer due diligence period, or anything like that – then I’m going to be looking at what other ways I can offer a benefit to a buyer that is still going to be okay for me and give me what I want and some reimbursement for that longer span. Remember that it’s not just price; it’s also going to be conditions.
And being prepared with the final result. Don’t go in thinking, “I would hope for this but I’m not sure.” You need to have done your due diligence. How much can you expect? Who is the buyer going to be for your property, so that you know what benefits to promote to them? Know what your fallback position is, but I would never tell the agent what your bottom price is going to be.
Kevin: No, that’s the golden rule, isn’t it? I like also what you said there about negotiation is not always about price. It’s about so many other things, isn’t it, Rachel?
Rachel: It is. Sometimes agents can be a concern because they only think about price and getting that sale through quickly, but it can be that you could make more money if you just wait a little bit longer with another condition that might be in there.
I would also suggest that if you’re going to be employing an agent, that if they negotiate on their commission straight up, then it’s going to be the right agent for you. Even when you’re looking to negotiate with the agent, again, I wouldn’t be looking at price, and if they bring down their commission first up, then they’re not going to be an agent that is going to be up to hold your price either.
Kevin: Some people ask why. It is all about if they can’t even negotiate their own commission, how good are they going to be at negotiating yours? A lot of people believe that knocking the agent down is the smart thing to do. I’ve always thought it was the worst thing to do.
Rachel: I’m with you, Kevin. It sounds like a good idea, and yes, it sounds very logical, but if you want your agent to be working for you and not just selling your property based on price – again, he or she would be looking at the bottom price then to get it through quickly – that’s not what you want to get the best out of your property, your investment, or your home.
Kevin: Absolutely. Rachel Barnes from Investment Friendly Agents.
Thank you so much for your time, Rachel.
Rachel: Always a pleasure, Kevin. Thank you.