Leverage power in the negotiation – Kevin Turner

Most will be aware of the crazy nature of real estate through the pandemic and particularly the second half of last year.    We have started to see a shift from a seller’s to a buyer’s market.

In its simplest form, the change to a buyer’s market is when the power in the negotiation shifts from the seller to the buyer.  Basically, who has the most leverage or control in the negotiation over how soon the sale is made and how much is paid.

There are several factors that indicate a market shift like this – consumer confidence, employment stability, interest rates – all the usual suspects but the biggest one is the amount of stock on the market in proportion to the number of buyers.   As an example, it is easy to see who would have the power if there was only one buyer and say 50 or 100 suitable properties to choose from.   Conversely, say 100 buyers and 1 or 2 suitable properties.   That would be a strong seller’s market.  It is all about competition.   An auction is a classic example where you have competitive bidders vying for the one property.

If the power is shifting to buyers, what do sellers need to know?  Using the examples I have just given of a buyer’s market, where a seller needs to compete with other similar properties and buyer numbers are restricted, the seller needs to make the property the most attractive.   And it is not always about price.

Look at your property through buyers’ eyes.  If you can’t do that objectively – on your own – get professional help:

  • A stager
  • A valuer
  • A buyer’s agent
  • A seller’s agent

Which is the best market to have?   Well, that depends if you are a seller or a buyer.  Here is the bottom line in both scenarios:

As a seller in a buyer’s market where the buyer has the control.   It pays to remember you only need one buyer.  You can only sell the property once so make it as attractive as possible and don’t get greedy – sometimes the first offer IS going to be the best offer!

If you are a buyer in a seller’s market where stock is in short supply, and you are in competition with other buyers.    When you see a property you like – be ready to move.  Speed is critical but above all – don’t just focus on price, find out what the seller’s greatest need is and scope your offer accordingly:

  • Settlement time – short or long
  • Quick settlement with a rent back option for a period
  • Unconditional with longer settlement – get your finance in place

No matter what the conditions or if you are a buyer or seller, you need to leverage the situation to your advantage.

Above everything else …… get a good agent.

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