How to get the truth and the best price
by Neil Jenman
This happens all the time in real estate…
Buyers make an offer on a home. They tell the agent they “won’t pay any more”.
The agent contacts the sellers and urges them to accept the offer. The agent may say: “If you don’t take this offer, you’ll lose these buyers.”
The sellers say no. They reject the offer.
The agent pushes the sellers harder. “This is a great offer. You really should take it.”
But the sellers hold firm. They refuse to sell at that price.
The agent leaves. Everything seems lost.
The next day the agent contacts the sellers: “The buyers have increased their offer.”
The sellers think: “If we took the agent’s advice yesterday, we’d have short-sold our home.”
But the agent is likely to say, “The buyers lied to us.” No responsibility accepted.
In the real estate world, agents often say: “All buyers are liars.” Granted, most buyers are circumspect with agents. But, when it comes to lies, agents have it all over the buyers.
Agents rarely blame themselves when things go wrong.
“It’s the buyers’ fault.”
“The buyers were telling lies.”
Or the agents’ favourite chestnut: “This is what the market is saying.”
So, sellers, you’d better reduce your price because “the buyers won’t pay any more”.
How can agents know if buyers tell the truth? How can anyone know?
Well, it is possible, so pay attention – this can be worth tens of thousands of extra dollars to you. It can stop your home from being short sold.
The “short-selling” issue is now so common that one Melbourne agent, Jim Grigoriou, who’s been in the industry almost 40 years says he has “Never seen so many homes short-sold”.
For several years, with much help, Jim has been researching his book, ‘The Real Estate Short-Sell – Australia’s Hidden Real Estate Scandal’.
His ‘First Rule to Prevent Short-Selling’ is this: Sellers should never reveal their lowest price.
In his book, Jim Grigoriou says, “Agents should get buyers to make their best offer. That’s their main job; it’s not to get sellers to accept their lowest. I cannot stress this point enough.”
Jim says sellers should make a strong statement to the agent: “We want to sell our home for the highest possible market price.”
But how can agents discover the buyers’ highest price? How do they know if buyers are bluffing? How do they know if buyers will pay more?
Most agents can’t answer such questions. Instead of learning how to negotiate, they just repeat their mantra: “Most buyers are liars”.
With negotiating, it would be more truthful to say, “Most agents are fools.”
Which is why most homes are short-sold.
The solution is simple: To discover the buyers’ highest price, an agent should ask them a simple question in a very firm manner: “Is this the highest you will pay?”
If the buyers say no, obviously, the sellers should not accept the offer.
Many agents ask buyers: “Would you like to make an offer?” But the buyers may have been happy to pay full price – or more.
“Again, this is how thousands of homes get short-sold,” Jim says.
When it comes to making offers, Jim Grigoriou says “buyers usually pay more than their first offers. Sometimes buyers go up in price many times. The game stops when sellers say yes, but still the home could have been short-sold. Agents must discover the buyers’ highest price.”
The way you know if buyers are prepared to pay more is if they want to hear from the agent again. After making an offer they will be anxious for a decision.
If you say no, they often increase their offer. Or they will ask you how much you will reduce.
DON’T TELL THEM.
Remember, you want to sell at their highest price, not at your lowest price.
Here’s what to do: Get them to say IN WRITING, that they are offering you their highest price and are not prepared to pay more. Also, ask them to pay a deposit – a sign of good faith. The more money they put up, the more serious they are about buying. And the more they pay.
Verbal offers aren’t worth the paper they are written on, says the old but true cliché. Ignore buyers who make low verbal offers. They are not buyers, they are “offerers”. Game players.
To know, for sure, that a buyer is offering their highest price, here’s what a skilled agent will do: Challenge them to walk away. With courtesy, of course.
If buyers are telling the truth and their offer is their highest, they will be willing to put it in writing, saying something such as: “If you don’t accept our offer, we won’t mind if you sell to another buyer for a dollar more. No need to contact us again.”
They are not part of the “buyers are liars” brigade. They are not playing games. From the homes they’ve seen, they like yours best and are willing to offer their best.
Agents who are trained in negotiation use this ‘WALK AWAY’ technique constantly. They persuade buyers to tell the truth and offer their ‘walk-away’ price.
Nothing is more important when selling your home than an agent who knows how to get the best price from the best buyers. A skilled negotiator. Such an agent can add tens of thousands of dollars to the sale price of your home.
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