Before I reveal my TOP SECRET: CONFIDENTIAL information on creating a Successful Negotiating Strategy there is one thing you first must understand....
To have POWER in a negotiation you first must have KNOWLEDGE. KNOWLEDGE comes from INFORMATION. But what type or kind of INFORMATION?...there is a lot of information floating around out there after all.
You need INFORMATION regarding your buyer, the seller, the property, the agent, the area, the market...
Now that you have successfully taken my Info 101 Course, let me descibe to you the steps for a Successful Negotiating Strategy:
1. NEED A PLAN - obvious right? Well, maybe not for everyone. Whether you already do it subconsciously or you need to start thinking about it more with your next buyer, you should have a plan and evaluate all of the STRENGTHS working in the buyer's favor. Like what though? Consider the following that may add POWER to your buyer's position:
Is it a buyer's or seller's market?
What is the Time & Condition of properties on market?
What is the current Market Conditions (season, interest rates, economy)?
What about their Financial Strength?…does being Pre-Approved make them more attractive?
What are the Seller's Motivations?
2. ASSESS THE BIG PICTURE - Create a CMA that is up-to-date to understand the overall market in that area. Differentiate your buyers NEEDS vs. WANTS vs. their LEVEl AFFORDABILITY. Bringing these things to light will help the buyer understand what will make a good/compelling offer.
You want a pretty,attractive offer the seller will want to take on a hot date NOT one that stinks and hasn't showered in a few days (pheww!)
3. DETERMINE YOUR BUYER'S OBJECTIVE - like James Bond, you must have an objective. You are on a mission to help your buyer get what they Need & Want, therefore you need to know what direction to head in.
Look at what is most important...Is it achieving the Lowest Price? Do you need to reach a specific Closing Date? What Concessions does the buyer need to include in contract? Basically...How do they separate the Wheat from the Chaff?
4. DISCUSS THE STRENGH OF YOUR BUYER'S NEGOTIATING POSITION - sit down and talk about all the above steps with your buyer so there is complete transparency. Speak with the other agent or seller in order to see and understand better the other party's position. Its a lot like Chess...Evaluate their position before your a move.
Then ask yourself...Can we make this a WIN-WIN deal?
5. FOLLOW THROUGH - don't do everything prior to this step then end up taking a left turn!! Stick with the plan silly!!! Now it is time to specify...Offer Price, any Clauses and/or Contingencies, the Terms of Financing.
Also, words of wisdom...."Plan for the Worst, Hope for the Best" - be prepared for a counter-offer!
All of these components are to be considered and when putting together an attractive offer for your buyer. You want to get the BEST DEAL possible obviously but it doesnt happy via MAGIC. Your must put in the TIME, EFFORT, SWEAT, & BLOOD...okay maybe not blood, but alot of hard work. These are the steps to give your buyer the best transaction possible! And after all that is what we want...to make our clients happy so they will keep coming back for MORE!
Sean S. Williams
Realtor®, ABR®, e-Pro®
1st Time Buyer & Relocation Specialist
of Louisville, Kentucky
"Eat. Sleep. Real Estate."
*Serving the Louisville, Kentucky & Surrounding Areas.
Trust in a dedicated Real Estate professional to cater to your needs.
Accredited Buyer Representative® , e-Pro®, First-Time Home Buyer Specialist & Louisville Relocation Specialist.
I would love to assist you today!*