In what is a tough, difficult period in the local property market where we continue to see large gaps in expectations between buyer and seller alike, the ability to get the deal together is often a case of how the negotiation is handled?
I have found recently several sales occur where the dates between first offer and final offer, for the same buyer was anywhere from 7-90 days.
The large gap in expectations is due to many factors.
2. Internet articles
3. Doomsayers predicting the sky falling
4. General fear and uncertainly
5. Global factors
6. Agent has not educated seller properly
8. Seller and/ or buyer with unreasonable expectations
Sometimes, early offers come in and the seller is yet to understand or accept the reality of the current market. Often, once the seller is certain that they are in fact dealing with what may indeed be “highest fair market value” in many cases sellers will do a deal with a genuine buyer, even though the offer may be lower than what is ideal.
Sometimes buyers might try on a low or cheeky initial offer, only to realise that a property they want might not be available at a certain level, so increase their offer as they realise that they need to pay more in some cases to get what they want. (Not all sellers will take any figure that is offered).
My advice in this market for buyers and sellers. – “Never be the first to walk away.” Often, good agents need time to “nurse” the offer through as each side comes to terms with what is the actual situation. Rejecting an offer achieves nothing in most cases. I have sold properties to buyers that had offers “not accepted” only to represent and repackage them later in terms agreed by the seller. In other words, the sellers did not walk away first.
Buyers need to understand that many sellers may be “shocked” by some of the market feedback in relation to expectations and need some time to take all of that in, especially new listings. (Despite how much factual information the agent may have provided the seller).
Sellers need to understand that buyers will obviously be in this market empowered and in many cases do not fear prices going up in the short term, and will often try a lower offer to see how genuine the seller is. (Riskiest when the seller sets overly optimistic or aspirational prices).
I believe that if the initial asking price is about right on day one, the seller has the best real chance of a premium sales price as the buyers will know that the seller is very genuine, very serious and therefore will have some fear of loss. They usually then make their first offer a serious one.
Recently we sold 2 properties at the $1M market segment in 44 days and 32 days respectively. This was in my opinion due to, through appropriate motivation by the sellers and the right asking price strategy, caused by being able to communicate to the respective buyers that the sellers were very pragmatic, reasonable and motivated in relation to price. The buyers therefore had no reason to wait and procrastinate waiting for the price to come down.
Buyers get a good property at a fair price.
Sellers get a result and can move on and at what I think it usually a higher price than the poorer cousins (other properties) that sit on the market 3 months to 2 years as some sellers are praying for better times past that are now gone.
Moral of the story, get it right the first time. Price right to sell, and you will. Buyers love it and sellers do to, as they get more and can actually move on.