Real Estate agents are crafty. Very crafty. How many times have you been to an open home and been utterly confused sometimes by what they are trying to say to you?
Many times is probably the answer. I was previously a Residential Sales Agent, so I understand some of the lingo. Unfortunately not everyone has that luxury, however, we’d be more than happy to help.
Understanding sometimes what an agent is trying to say, can open Pandora’s Box in your negotiations. Being able to understand and read between the lines also, can effectively open extra lines of questioning for you to inch out some extra information that may prove vital. Agent’s get frustrated if you get angry at them, for not understanding their dialogue, so they’d often enjoy actually dealing with you more than those who try to smack the information out of them.
Think of it like a game like Fallout or Oblivion. This guide will give you +10 speech points, which will usually open up some extra dialogue for you in-game.
Turner’s Tip 1: Read between the lines
The agent never truly tells you exactly what he’s trying to say. He’ll shroud it very often in between the lines. Learn to read them and decipher. To make things harder, not every agent interprets their dialogue in the same way, so often you may learn to understand based on previous dealings. Play it by ear. You’ll hear a phrase or a handle of some description, think about it carefully and try to work out the hint there.
Turner’s Tip 2: Price Guides
Price Guides have always been a tricky point, but most of the rejections and anger towards them come from people who do not understand how they are set. When an Agency Agreement is signed, an Estimated Selling Range is detailed, based on market evidence. This is generally (and very soon legally) a 10% range based on market evidence. Most agents set the Price Guide at the bottom point of the range, and they are entitled to. Don’t take out your past grievances with other agent’s price guides on the agent you are dealing with. They’ll honestly just think you don’t know what you are doing and are definitely not a serious buyer. Which in 90% of cases is true. A property selling for $1,300,000 when a price-guide is $1,150,000 offers above, is not the agents fault, but generally the owner’s expectations, and more importantly the buyer. Someone was willing to pay that amount, so therefore the property is worth that. It’s how the property market works. Competition is your enemy, not the agent. They are doing their job.
Turner’s Tip 3: Price Dialogue
When you ask an agent for some information about the price, you’ll often be met with a wide range of responses. Many will just reiterate the price guide. In that case, ask the agent how many buyers they’ve had, what sort of interest they’ve received, and how many offers. They may lie or shroud truth about interest received, but they’ll generally tell you how many offers.
If you ask them how many offers they have had, and they respond with something along the lines of “we’ve had significant interest …” as opposed to entailing offers and amounts, they haven’t received any.
If they give you just the price guide, work it out based on the competition. Don’t expect to get a bargain. You won’t.
Turner’s Tip 4: We are just taking offers
Some agents will respond to you with dialogue like “at this stage we are simply taking offers”. In this case, they will be saying the same thing for the entire campaign. Either that or the owner is incredibly unrealistic with price. Best option here is to honestly low-ball the agent and invite them to make a play. The ball is in their court in that case. Agents who don’t price guide actually miss out on 80-90% of the market and buyers, but they refuse to listen to REA’s statistics.
Turner’s Tip 5: Work the counter offer
Make them play. Negotiations are a game, put the ball in their court. Once you’ve made an offer, the agent may often turn around and tell you ‘kindly’ that your offer has been rejected. Don’t get baited though. If you don’t respond accordingly, you’ll be used as leverage in another set of negotiations, so you need to assert yourself as the serious party in the negotiations. You may hear “unfortunately we are just a little bit shy of where the vendor was expecting” – generally means “you are well off, and your next offer will be used as leverage when I call the next buyer as soon as I get in the car.”
Ask the agent where you need to be for your next offer. They’ll throw you a number perhaps. This is their counter-offer. It’s generally been pre-discussed and worked out. Don’t meet their offer. In this case, meet them halfway, and put it in writing. Have it presented to the vendor. If you are the only offer, the agent may try to chip the other party down to meet you, or come back with a revised counter. At this point, you have the agent hooked. Control the negotiations if you can, but don’t let it get out of hand. Remember, Estate Agents negotiate every single day with every single person. They’ll beat you. Just play the game where you can.
Turner’s Final Tip: Many of these will never work!
The beautiful thing about this is that many of these tips, will be wrong, in your scenario, and you’ll devise your own set of strategies with the agents. It really depends on your market, the agents you deal with and the type of property. You’ll learn or adapt your own tactics, and take these if they seem applicable.
In this case, these tactics and theories generally work in Sydney Metro, with mid to high competition. But the general themes apply. Get a counter offer. Don’t treat the agent for an idiot, read between the lines, and don’t try to outright win the negotiation, work with it.
Image Credit: NetMinder IG (Flickr Creative Commons)