When it comes to negotiation, a streetwise attitude and an awareness of the tactics used by agents will give you a major competitive advantage. Generally, I believe negotiation is about hiding your bottom line, being patient, and teasing information out of the other person at every stage, which you do by being a good listener and a keen observer of body language. Your body language, words and actions are important at every stage the negotiation. You will often see TV property ‘experts’ show their enthusiasm for a deal from the very beginning, but this is actually an example of very poor tactics. I treat every contact with a seller as an information-gathering exercise to gain insight into their thinking and price expectations, taking care to give nothing away myself. I believe negotiation comes down to knowing the strength of the hand you hold, and on backing up your offers and arguments with solid logic and relevant prime history comparable data. This will help you to justify and reinforce your position, especially in the case of unrealistic or difficult sellers. For some deals, where the seller has unrealistic expectations, it takes time and patience, and you build a relationship with your seller as they go on a ‘price discovery’ journey.
For key sites, I always try to maintain this relationship by building a rapport and keeping in regular contact, so I am in pole position when they reach the end of that ‘unrealistic expectations’ journey. Effective negotiation tactics ultimately depend on knowing whether you are in a buyer’s market or a seller’s market. Despite the current property boom, there are lots of buyer’s markets inside any given geographical area.
In my area, the current buyer’s markets are: L4, L5, parts of L6, L9, parts of L12, L13, L14, parts of L19, and L20.
An easy way to spot a buyer’s market is to look at the number of available derelict buildings. You should also look at official Government data to find out the benefit claimant rates in that area and compare it against the national average. You can find the relevant data at www.nomisweb.co.uk.
