Do you LOVE the thrill of negotiating?
Does your blood pump through your veins and make you feel wildly alive every time you get the opportunity to buy something and haggle in the process?
Do you love the feeling of winning and getting the very best deal?
Love the game of negotiations?
If you’re on the edge of your seat, leaned right into the computer screen right now feeling like your body is screaming a big fat YES to everything I just said, chances are you are a born negotiator.
If, on the other hand, you’re recoiling at the very thought of what I am saying and wondering why on earth ANYONE would love these things, then chances are you are going to cost yourself $30-$50,000 when you buy your next property.
Read on to discover why and what you can do about it.
Hey, don’t worry if you don’t enjoy or thrive in a negotiation situation. You’re not alone, not everyone is a born negotiator. The great thing is that you know this NOW before you go out and lose a stack of cash when you really don’t need to.
If you’re about to purchase a home or investment property you NEED to be a strong negotiator. If not, you may as well go and tear up $40,000 right now.
Negotiating with a vendor and sales agent is a crucial piece of the property buying journey that must be done if you want your signature on the bottom of that contract to purchase. How will your negotiations pan out if you hate the thought of negotiating?
How much are you going to pay for your new home or your investment property when it comes time to haggle over the buy price? Too much, is the answer. And my recent trip to Morocco illustrates this perfectly!
I has been a bucket list dream for me to go to Morocco and choose my very own vintage Moroccan rug.
Just like new home buyers, I had no idea just how hard finding that perfect rug was going to be.
It was exhausting.
Where would I go to buy it?
Which shop was the best option?
Were the asking prices fair and reasonable?
What price should I pay for the rug?
Is it already a good deal?
What do I need to know about rugs before I will be educated enough to make smart decisions?
I even went through the roller coaster of emotions home buyers go through;
I even went through the roller coaster of emotions homebuyers go through;
- Excitement and anticipation
- The trepidation of looking at the first 30 rugs;
“What on earth should I be looking at and for in a rug, aside from how pretty it is?”
“Am I ever going to find the rug that I really want?”
“OMG, we are never going to find a rug.”
- This is exhausting. “I’m over it.”
- “Oh no, I’m going home without a rug.”
- “I’m so deflated and sad.”
- “Ooh” – Renewed enthusiasm. “I CAN do this.”
- Renewed commitment to my goal
- A refined strategy
- More looking…(that went on for a while)
- BINGO – we found “the one”
But now what – the price he’s given us is already reasonable. Or is it?
Having a break from work, I was hoping to sit back and have my husband handle the haggling. He had already sucked big time when handling 2 previous negotiations in Morocco. But with some coaching and tips under his belt and a strategy handed to him on how to play this, I was confident he would nail the rug negotiations.
But as I told him what to do I could see him already recoiling. He was not comfortable with any of this. He felt bad negotiating and believed every negotiation tactic thrown back at him by the experienced rug vendors as if it was true, not just a negotiation tactic. Knowing he would not be successful with those feelings and lack of confidence I had to change tactics too. I would step in and help, but I was still hoping he could do most of it with me playing just a small role.
All he had to do was tell me in front of the sales consultant “We are not paying that price for this rug” and stick to it no matter what happened. No matter what the rug vendor said back to us, until we got our price.
So we re-started the negotiations and within seconds we were losing hundreds by the second. The sales person naturally responded with a very plausible sounding answer to my husbands objection of not wanting to pay that price.
I looked up expecting my husband to hold strong. But what I saw instead was hubby’s head nodding in acceptance of what the sales consultant said. His whole body language began to change instantly as he believed and then sided with the rug vendors point of view.
“Oh Sh*t! He’s tanking.” He was just not experienced enough to spot the bluffs! He was seconds away from paying full ask price.
I had to get my husband out of there. He was losing us money!
I took him up the road, wasted an hour so it seemed like we were really thinking about things and returned to the shop without my husband. He told me the figure he would really like to pay and off I went, leaving hubby to enjoy the sights of Marrakech while I handled the negotiations. The negotiation took half an hour and included 4 walk outs on my behalf. It was all a fun and exciting game and in the end we got the rug for the price my husband set and the shop owner came out reasonably well too.
Negotiation is a sport, the rug vendors relished in the game allowing me to walk away so I didn’t feel like I had an upper hand. I had to find ways to go back without appearing to weaken my position also. Each time I went back I had to employ a strategy to get the end result we wanted.
I felt right at home being an advocate for my “client” (husband) and got the deal done. Easily. I didn’t feel bad. It felt good. I felt alive. I loved every god-darn 2 hours of it. And so did the carpet vendor. They love the “game”of negotiations and are masters at it. Their livelihood depends on being great negotiators.
This was the moment I really saw for the first time just what a difference a strong and experienced negotiator makes. Now we are talking about the difference of spending $1300 – $16000 on a rug versus negotiating it down t0 $800-$900. So the loss we would have realised due to poor negotiations was minimal.
But what if it was a $500,000 or $800,000 home or investment property? What sort of money do you think my husband’s lack of experience negotiating would have cost us?
I would say approximately $40,000.
$40,000. Let that sink in.
Are you ok about giving away $40,000 because you have convinced yourself you can wing the negotiations?
If you answered No and you are about to buy a home or investment property, here’s what you can do to keep that money in your own pocket.
1. Get some negotiation training ASAP
Whether you read a book or two, watch some youtube videos or take a short course on the art of negotiations, at the very least do something!
2. Practice Makes Perfect
Try out your skills on low level items that you are not emotionally invested in. You can even practice negotiating with sales agents on properties you don’t want to buy – just don’t put pen to paper unless you want to own it!
The very first thing any agent worth their weight will do is try to get you to put pen to paper. This is a negotiation in itself – try and negotiate your way out of placing a formal offer and attempt to negotiate price without committing to an offer in writing.
3. Outsource the negotiations
If you have a really skilled negotiator in the family, ask them to help you. Just make sure they really ARE skilled first. They could really botch things up for you and lose you the property of your dreams if they don’t have genuine skills and a lot of experience dealing with selling agents.
They must be able to read the market conditions and the state of play really well to ensure they approach the negotiations with a strategy that will work in that precise scenario. (yes, there are different approaches to employ for every circumstance.)
4. Or hire a professional
One of the things we do daily for our clients is negotiate with selling agents. We are used to the common lines and objection handling strategies employed by agents.
We know when they are the real deal and when they are an attempt to extract more money from our buyer. We call their bluff and save our clients money.
Not only that, we are also very competent, comfortable and love the thrill and excitement that comes with negotiating.
When you enjoy what you are doing you are open and wanting to learn, study it and get better with each negotiation. It becomes a sport. “How hard can I push this negotiation without risking the deal?”
When you hire a buyers agent to handle the negotiations for you, you also level the playing field.
Selling agents are negotiating all day every day. Chances are if you have read this far, you’re not. On top of this, you probably in all honesty don’t enjoy the thrill of negotiation.
If this is true, then the reality is you are not likely to be a strong negotiator because we tend to avoid things we don’t enjoy. You will have avoided honing and practicing your skills in this area.
A professional (and experienced) buyers advocate will meet the sales agent head-to-head and in some instances be an even better negotiator than the agent – which will put even more money back in your pocket.
Sure you may have to pay a professional circa $10,000, but if you would have lost yourself an extra $40K, you still come out ahead in this scenario.
If you recognise yourself in the story I shared about my darling husband it may not be the best thing for you to handle the negotiations. We all have our strengths. The important thing is to recognise what yours are and are not.
Tackle what you are good at. Learn & Practise what you are not skilled at so you can improve or, for best results, outsource to a master negotiator.
PS – no husbands were harmed in the making of this article. I was given permission to share our story in the hope we could benefit you and others in some way. It is not to mock or put anyone down, we actually giggle over it regularly. I believe we all have our own strengths and weaknesses and there is no shame in recognising our not-so-strong points. I have them too, and my husband steps in to take care of the areas that I am not as strong in.
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