RES Articles

When it comes to negotiating a sale with a real estate agent you need to remember that real estate agents are paid negotiators that do it every day for a living. You might back yourself to go head-to-head with an agent and in general to buy a property you will usually have to at some stage. You need to understand the real estate agent is working for the vendor and that the more money you pay the higher commission that he/she will earn. Plus, by getting an over-the-top price they are a better chance of being recommended into their next listing. You don’t want that to be at your expense.

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With the market slowing down, I am seeing a lot of auctions passing in and sold to the highest bidder on the day straight after the auction. The auctioneer will use the words “if the property passes in, we will negotiate with the highest bidder at the vendor’s reserve price exclusively”. Did you know that after almost every passed in auction the negotiating agent/auctioneer will add an average of $10,000 to $50,000 above the actual reserve to start the negotiation? Yes, that’s right, remember what I said about the agent working for the vendor. You need to keep a cool head and keep in mind that the vendor is probably even more nervous than you are, and will most likely sell for $5,000 to $50,000 under their reserve price to get a deal done. (if you negotiate well) So, if you ever find yourself in this situation consider that everyone wants a sale and that the better job you can do in those 5-10 minutes the more you can save. You might be good enough to get the house $50,000 under the actual reserve price. Think about how long it takes you to save that money especially after tax.

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In my over 20 years as a real estate agent, I have found that there are a lot of sales that are made by the buyer paying more than they intended to, but at the same time the vendor accepting less than they intended to. My advice to sellers is to listen to feedback, don’t take negative comments to heart and hire an agent that you are confident with when they enter the “Lion’s Den”. My advice to buyers is have a crack, don’t get down if you miss a couple and don’t die wondering. If you like a house and even if you think your offer won’t buy it have a go. I’ve seen a lot of houses sell for less than what I thought they were worth, but I’ve also seen a lot of houses sell for well over what I thought they were worth.

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I guess the moral of today’s article is to understand and appreciate the opportunity that is in front of you whether as a buyer or seller and don’t underestimate an agent’s ability when it comes to negotiating. In a time-frame of 5 minutes by negotiating well you could save enough money to take the family on an overseas holiday or renovate a kitchen. (or just have a smaller mortgage) When you look at it like that you really appreciate the difference a good negotiator can make.