The high ground is what you need in any negotiation. Here is how to talk to buyers to do just that.
Topic – Rik’s Fast Five
Mentor – Rik Rushton
- Getting a buyer to make a decision
- How bragging will come back to bite you
- Giving a buyer a reality check
Property Management Matters with Kasey McDonald – Today Kasey talks about Property management workflows (checklists) and why they are still important and relevant in your role and why you should consider the online platforms available to help with automation.
Transcript:
Kevin: Rik Rushton, our mentor this week, helps us with some dialogue when we’re talking to buyers, how you can keep the high ground in the negotiation.
Rik Rushton: Well, I think what they try and do as we know, they try and time the market where they want to buy at the real bottom of the market. They want to make sure they’re getting a deal, and they don’t want to overpay. And they’ve probably come out of the last three to four years of having to overpay and having to compete quite aggressively and we’re hearing we are our own worst enemies in our own industry sometimes, Kevin. Why, broadcasting, you know, we’ve got a hundred grand over reserve or two hundred grand over reserve. Buyers are now thinking, “Hang on, we hold the aces now in this game.”
Rik Rushton: And so one of the things they’re trying to do is to come in low, if they come in at all. If the price expectation is a million dollars, they might come in and test the water with an offer around eight, eight fifty, just to see how we handle it, first more importantly. And so before it even gets to my owner, I want the actual buyer to know that I’ll say to them, “Look, based on that sort of number, thank you for the offer. But based on that sort of number, you will definitely have a brochure and a floor plan. But someone else is going to get the keys to live in that floor plan. So if you want to get on with this, you need to give me something that’s going to actually bring the owner’s attention to a sale, not the owner’s attention to ‘Let’s dismiss them and go find another buyer that’s going to pay us something more in line with what we were expecting.'”
Rik Rushton: So buyers need a bit of a subtle reality check, and there’s a fine line between confidence and arrogance. But if you speak that dialogue confidently, Kevin, what you do, you give the impression back to the buyer, “Well, if he isn’t even going to crumble, there’s a strong chance the vendor’s not either.” So I’m not saying you’ll get a million dollars. I’m tipping their next offer will probably be in the nines. That’s the way we want to be able to do that in this day and age.
Kevin: Mm-hmm (affirmative). Give me that dialogue again, mate. What do you say to them?
Rik Rushton: So I say to them, “At that sort of number, you’ll definitely have a brochure, but someone else is going to get the keys.” “At that sort of number, you’ll have a floor plan to look at on the back of the brochure, but another buyer’s going to get to live in that floor plan. They’re going to place their furniture in that floor plan. That offer is not going to go anywhere near securing you this property. If this is the place you decide to call home, let’s get on with it and I’ll make sure you stop paying your landlord’s mortgage and start getting into your own equity game by getting this property, but you need to start thinking closer towards the reality of what the price is.”
Rik Rushton: So they’re looking for that deal. We’ve got to show them what a deal is.