Tips for successful negotiations

Sometimes in a buyer’s market there is a presumption that because a lot of options may be available, then one may select indifferently from the many options available as long as the property meets the minimum requirements. This approach normally leads to a lot of disappointment either when the property is snatched up by another buyer in the market who is bold enough to put up a higher offer or because negotiations have fallen through as a result of a conflict of egos.
It is critical to appreciate that the negotiation stage is a complex issue as both parties normal approach to this stage is with preconceived ideas and fixed end positions.
There is a propensity to mentally over-value either the property itself of the value of their money.
Human psychology tends to assume other parties reactionary behaviour based on personal experiences.
There are elements the negotiating parties have to consider in the negotiating stage.
It is paramount to always remember that liquidity plays a crucial factor. Here the focus is mainly on whether it’s a buyers or sellers market. After determining what type of market it is, it is important to remember the benefits that accrue with each particular market type and to which party. It is not a given that because it is a buyer’s market, the seller can easily be arm-twisted into accepting an audaciously low offer that defies logic.
At this stage the buyer has to consider the personal allure of the property to them.
This may be deduced from viewing the other properties. The general market price of similar properties must be kept in mind and consideration should be given whether the asking price of the property of interest is so far removed from the general listing prices of similar properties in the market to make it unreasonable.
Once that aspect has been considered and the buyer intends to continue with negotiations, both parties must look at their negotiating leverage.
At this stage, the seller through general questioning of the potential buyer or their representative must establish the factors that attract the buyers to a particular property.
A viewing of other listed properties in the area to gauge the standard of competing properties is a must as the sellers actual leverage may be ascertained from such investigations. The buyer must through his representative, investigate where possible, the offers that seller may have received or is considering.
This is because if there is a higher offer then the seller naturally will choose that one unless the leverage on one’s particular offer is the terms of payment.
If the buyer wants to understand his leverage, there is need to investigate the reasons for sell.
This will give a clear picture of whether the sellers are in a position to consider low ball offers.
On top of understanding the reasons or the objectives the sellers want to meet after selling, one also has to consider the time the property has been on the market.
This will avail two scenarios. One may be that the seller might be frustrated by the lack of securing a sale to the point of negotiating lower than previously envisioned or that the seller is not willing to go lower than a certain benchmark and is willing to wait until that is achieved.
One may also utilise the subtle details in the property for negotiation, which can be defects or a lack of them, extras on the property or a lack of them.
Payment methods offer a good negotiating leverage whether it’s a mortgage, part payment transaction or one-time payment. However, regardless of how one may wish to negotiate it helps to have a seasoned negotiator in the team.

l Vengai Madzima is a property consultant and analyst with Wisdom Properties Real Estate. He can be contacted on 0772468093 via e-mail [email protected]