Negotiation - It's All About The Terms Not The Price |
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By: Grant Thorpe Posted: 2008-01-16 04:52:16 |
| The Price is not the only part of the deal? That's right the Terms and conditions are often the most critical.In fact the most effective and productive real estate sales people are the ones that can create an offer on 'creative' terms and conditions where the average agent can't even see that there is a deal right in front of them?One of the biggest mistakes a real estate sales person can make is to just focus on getting the seller the 'seller's price'. They become so focused on this that they (without evening realising it) are pushing the buyers right away.As a general rule, sellers are 15% over priced and the buyers 10% under priced, so unless you have a strategy to bridge this gap then you are destined to have a listing expire before it gets sold, and as a result, no commission in your pocket, and no testimonial to gain the next piece of business.At the time of the listing it is essential to interview the seller to understand not just their reason for selling, and their motivation, but most importantly their flexibility to negotiate a deal. What concessions can they make, when the times come to negotiate a contract?The average agent will ask if the dishwasher is staying, or the spa pool remains in the deal, but the super agent asks the really good questions.The more information you gain here is all very important later when you will want to shape an initial deal on terms the purchaser is willing to commit to and have you present.I remember having a coffee with a developer I was doing a lot of business with and in the conversation he mentioned to me he was thinking of buying a new boat. We talked about this for a while, boat and fishing talk, at the time I thought nothing more about it, it was a chat over coffee. I returned to the office and about three hours later, I was on the phone talking to a client, when I overheard a customer speaking to the duty agent. He had walked in and asked if the agent knew anyone who would swap a boat for two houses. The agent answered No, he thought that was a real long shot. That was to be the end of the conversation, and the buyer was turning to walk out. I could not get off the phone quick enough, after a quick deal with the duty agent to take over the buyer; I raced up the street after him. Within an hour we were at the harbour on the jetty viewing a boat, and by the end of the day, I had sold two houses and a boat! And made three commissions.How good is that? It was not about the price; it was all about the terms and conditions. It was about satisfying both parties end goals, price was just a small part of the deal. Well what type of questions should you ask?Things like Can they offer a long settlement? Can they leave money in the deal for a period of time? With or without interest being paid? Can they trade a property to create a sale (and you make two commissions). Will they offer to rent the property to the purchaser prior to settlement, or allow the purchasers to make improvements to the property before they settle? There are so many more examples, and all I can say here is that before you write any deal off, take a slow walk around the block and ask yourself, how can this deal be put together? What is each party trying to achieve and what can you construct to make that happen for both of them? I have had deals where the pet sheep in the paddock have been listed as part of the deal.I even remember a 6 house deal where I had multiple properties stacked up all conditional on the other selling, the lowest property was worth (at the time) about $150k and the highest one worth about 1.5 million. We needed the bottom property to sell so everyone else could move on up the chain. In the end I negotiated with the seller of the highest value property to buy the lowest one as an investment property to trigger the whole chain. So simple really!So while the price is what all parties focus on from the beginning, the most important factor for the seller is that they get a result, get sold and move on. After all, the one thing that is going to fund their dream is the one thing that is also stopping that dream from happening, so they need to get the house sold to move into the next stage of their life.And for the purchasers, I have never seen a deal fall over for $10k, if you can get within selling zone, then often some creative terms and conditions is just what is needed to bridge the gap.Just like for your sellers, real estate is there to supply you - your dreams - too. Is the one thing that you can have fund your personal dreams -also the one thing that is currently getting in the way of you creating a wonderful life for yourself.Grant Thorpe is an internationally recognized achievement based Real Estate Coach, Mentor and Professional Speaker.His specialty as a coach is working with high performing entrepreneurs, business owners, CEOs, corporations and salespeople from around the world. With a Real Estate coach, you will heap success on success until you gain the balanced and rewarding life you desire and know you deserve.Read more about the results Grant Thorpe can achieve for you on his website at http://www.grantthorpe.comListen to his audio series http://www.realestatesalessecrets.com Grant Thorpe is the author of the book 'Easy Million Dollar Idea', download your free copy from http://www.easymilliondollaridea.com |
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