Prepare for the presentation of your offer:
Make the appointment as soon as possible – Time is the death of a sale.
- Be in the right frame of mind.
- List 10 reasons why the seller should accept the offer.
- List any potential objections and how you will address them (SWOT).
- List your MIL’s & any other negotiating points (e.g., RNS average, etc.).
- Avoid discussing the offer telephonically, as you cannot see reactions.
- Confirm with the seller that he has sufficient time to discuss & accept the offer.
NB! Ensure all sellers are present – if not, make an appointment for another time.
The appointment:
- Do not place yourself between two sellers – you need to see both of them at all times.
- Watch for body language – if the sellers are ‘closed’, talk about other issues before you get into the nitty-gritty of the offer.
- Keep control of the appointment at all times.
- Begin with the minor closes: get them to fill out their details, discuss fixtures, etc. (i.e., a mini-close).
- Deal then with suspensive conditions – if the offer is uncomplicated, acceptance of the price becomes a lot easier.
- If they show shock at the price, ask if they have any other written offers – the absence of offers is an indication that the asking price cannot be justified.
- If you get into a ‘counteroffer’ situation, warn the seller that they may lose the buyer.
- Once the seller has accepted, ensure you explain each clause to them.
- If all else fails, find another buyer!
Points to remember:
- You are only facilitating the deal, so do not get emotionally involved.
- Do not negotiate on your commission (unless a reasonable amount) – learn to walk away from a deal. Often a seller will accept if they think they may lose the deal.
- A note of caution: never let the seller know that the buyer is ‘desperate’ for the house, as they will be less likely to negotiate the selling price.
- The longer you allow the seller to “think” about the offer, the more issues will arise – so avoid this wherever possible.
- The seller pays the commission, so make sure they know you are on their side.
See clauses 5, 6, & 7 of the Code of Conduct.
The Counter Offer:
Avoid having the seller reject the offer out of hand – if you do so, you have lost the sale. Rather get them to propose *their* terms. This then still gives you the opportunity to go back to the seller and start the negotiating process. However, do not give the seller time to think about it, as if they take too long, the offer can expire!
Recognise that some people need “to haggle” – so be prepared and enjoy “the game”!
For a counteroffer to be valid, it needs to be:
- Accepted by the purchaser (do not present telephonically – it’s too easy for a purchaser to then decline!).
- Within a specified time period.
- Within reason.
- Reduce the difference to a monthly amount payable on their bond… i.e. an additional R10,000 = approximately R150/month – however, keep in mind what the purchaser qualifies for.
- Appeal to the purchaser’s “fear of loss”.
Seller influencing factors:
- If they have a lot of interest in their property, chances are they will be reluctant to accept a lower offer.
- The longer the property is on the market, the more the seller is open to negotiation.
- Too many suspensive conditions can be off-putting, as this may draw out the process and still result in no sale. Therefore, make sure your suspensive clauses have a time frame or escape option.
Note: Do not accept a counteroffer if you have advised the purchaser that the offer they have made is fair and market-related. It would be very difficult to then justify the higher counteroffer. Therefore, it’s best always to say nothing!
Try not to split the disputed amount exactly in half – remember, you are working for the seller, so they need to feel they are getting more. It is also better to draft the counteroffer on a separate document and get the seller to sign. That way, the original offer stays valid until the expiry date.
ONLY AS A LAST RESORT – negotiate your fee, but NEVER USE YOUR FEES TO BARGAIN WITH!!!!!