Today I am going to give you just one crucial tip on property negotiation. This tip is simple but it has the potential to drastically improve your conversion rate.
If you really want to turbo boost your offer to acceptance conversion rate (The amount of properties you put in an offer for that get the offer accepted), you must improve the amount of times you get to deal directly with the Vendor. Sometimes this might not be possible as the vendor might live overseas, or perhaps in another part of the country. However even in these circumstances it can be beneficial to speak to the vendor via phone, fax or even email.
Estate agents will often try and keep you from meeting the vendor. They see themselves as the professional negotiators and know that the higher the price they get for the property the higher the commission for them.
So how do you get to speak to the vendor in person?
Well it’s simpler than you might think. One of the simplest and most successful ways is to simply arrange to view the property at a time that you know the estate agent can’t or won’t want to be there to show you around. For example: 8pm on a Saturday night, or 8pm any night in fact. Hardly any estate agents will want to be showing people around properties at this time.
This would obviously be at least your second visit to the property as your previous visit would have been in the day time so that you could see the property and the area it is in in the daylight.
When you have suggested the 8pm time the agent will normally pause and say he just needs to check with the vendor because it is not a time he can do but the vendor might be able to show you around and he will call you back after he has checked with him. Usually within a short space of time you should have received a call back saying that is fine.
Once you are dealing with the vendor in person you can find out why they really want to sell and then you can go about matching their needs with what you can offer and trying to create that win win situation for the both of you. If at all possible don’t leave the property without getting some sort of contact number for the vendor directly, either his landline or his mobile, and always leave your direct contact details, because from this point on you can be in negotiation directly with the vendor and cut out the middle man (the estate agent).
In the end if the sale goes through the estate agent will still get his commission, it just may not be as much as he hoped for because you have managed to get the vendor to agree a price that is well below market value, which might have been more difficult with the estate agent involved.
The key to negotiating with the vendor is to create a win win situation where you are both getting something positive out of the negotiations. In fact the real key is to try and let the vendor believe he has won in the negotiation in some way.
For example: You started the negotiation offering 35% below market value i.e. current market value for the property is £100,000 and you offer £65,000 and in the end the vendor ends up selling the property for 25% below market value (£75,000), therefore he believes he has been an excellent negotiator by getting the extra 10% (10,000) out of you.