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How to be Successful in Property Negotiation

You Negotiate Everyday – Anytime You Want Something From Someone And Anytime Someone Wants Something From You. In A Successful Negotiation, Everyone Wins. So how do property buyers tip the scales in their favour? The simple answer is by understanding how to negotiate. Yes, even in today’s property markets, buyers who know how to apply these five critical negotiating pressure points can get the upper hand.

These approaches are at work in every negotiation; either you are applying them to the other party or they are using them on you. Hence it’s important you know them and practise them.

Now let’s look at them…

  1. Options

Since the power in negotiations goes to the person with the most options, when you’re buying a property it is important to convince the seller that you have more options than they do. Look at it this way…  If a seller has two buyers lined up waiting to offer him N5, 000,000 for his property, he has options. You probably have little chance of getting him to accept your offer of N4, 800,000. However it’s important to realise that in negotiation you often deal with perception rather than reality.

Agents will sometimes tell you they have other buyers interested or they have better offers than yours, but they’re simply applying tProperty Negotiationhis pressure tactic on you. To gain power in negotiation you must convince the vendor through his agent that you have more options than they do. Currently this isn’t too difficult because in most markets there’s an abundance of properties on sale. Let the agent know that there are also other properties you are interested in. You could say something like: “We like this property but there are two others we have in mind in a better location and at a lower price”. Remember the person with the most options has the upper hand in the negotiation.

  1. Time pressures

If you find a seller who is highly motivated because they are under time pressures you could find yourself a terrific buy. While it may be hard to work out what type of pressure the vendor is under, the selling agent will sometimes tell you that they have already purchased another property and must settle at a particular time or the owner is selling because he/ she needs money to sort out so and so. Other time motivated sellers include people  moving out of town, lost job, pay medical bills, school fees etc.

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To help find out how motivated the vendor is you could ask the selling agent why is the vendor selling, where are they moving to and would they consider a lower offer for a quick settlement? Eighty Percent of Concessions Will Be Made In the Last Twenty Percent of the Time Available (80/20 Rule)

Other sensible questions to ask are: 

  • How long has the property been on sale?
  • Have they received any offers on the property?
  • How did the vendor come to his selling price?

Time Pressure Is One Of The Strongest Forces In Getting Concessions In Negotiation. In Negotiation Time Is Money.

  1. Knowledge

In negotiation the side with the most knowledge will do better. Fact is, if you’ve done the proper research you should know more about the property market in which you are buying than the seller. However apart from researching the local property market it’s also good to find out what you can about the vendor. The problem is that most of what you know comes from the agent.

Of course the reason you should find out as much as you can about the seller and their property is that it will give you a better insight into the real motivation for selling. This could lead to a creative win-win solution that will let you buy the property at below market price.

  • The More Knowledge One Side Is Able To Get About The Other, The Better Chance There Is For Victory.
  • Ask Questions – Directly From The Person(s), From Others, From Professionals.
  • Choose A Neutral Place For Preliminary Information.
  • Look Out For Verbal And Non Verbal Cues. Test The Validity Of Information
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4 Communication- Body Language-LISTENING – The key

  • Avoid Negotiating Over The Phone
  • It Is Better To Disperse The Negotiation If You Are Outnumbered
  • Men Will Normally Keep Their Jackets Buttoned Until They Feel Comfortable In Their Surroundings
  • Study Blinking Rates – The Eyes Have It
  • It Is When There Is A Change In Behavior That The Good Reader Of Body Language Should Pick Up His Ears And Be Careful

Hidden Meanings

ALWAYS LOOK OUT FOR THINGS THAT ARE BROUGHT UP WHEN THE TIME IS RIGHT AND /OR AT THE POINT OF LEAST RESISTANCE

  1. Power: A Subjective Mental Force (Perception)
  •  If You Believe You Have It, You Have It.  If You Believe You Don’t (Even If You Do), You Don’t Have It. ( sources power in property negotiation: Cash, asking question, Title Power, Reward Power, Charisma Power, Expertise Power, Situation Power, Information Power, Surroundings Power , Confusion Power, Competition Power, Risk Sharing Power, Identification Power, Legitimacy Power, Commitment Power, Persistence Power, Precedent Power, Attitude Power)

THE POWER IS WITHIN YOU, ALL YOU HAVE TO DO IS FIND IT

HOW BOTH SIDES CAN WIN

  • Both Parties Should Accomplish Something Important
  • Both Sides Have Cared About Each Other’s Objectives
  • Negotiations Conducted Fairly
  • Both Sides Feel They Would Like To Do Business Together Again
  • Each Party Feels The Other Is Determined To Keep To The Contract

In summary:

Remember these five (Option, Time, Knowledge, Communication and Power) critical negotiating pressure points when negotiating your next property purchase.

EVERYTHING YOU WANT IS WITH SOMEONE ELSE BUT YOU HAVE TO DO MORE THAN ASK, YOU HAVE TO NEGOTIATE

If you think we can be of help to you on your next property acquisition, you can send us a mail on: askme@propertymatters.com.ng or call: 09055522231

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ORY MARTINS

Ory-Martins has been consulting in management and real estate for more than 10 years now. He is Chief Executive Officer of Boeing Luxury Estate Ltd, a foremost real estate developer in Nigeria, Principal Partner, MP Hills Consulting and CEO of Inicreat PMA Ltd, a real estate consulting firm. He is an On Air Personality with major radio stations in Nigeria

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