Prepare for the presentation of your offer:
Make appointment a.s.a.p. – 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 i.e. 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 some other time.
- Do not place yourself between 2 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 him to fill out his details, discuss fixtures etc (i.e. a mini close).
- The deal then with SUSPENSIVE conditions – if the offer is uncomplicated, acceptance of price becomes a lot easier.
- If he shows shock at the price, ask him if he has 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 he may lose the buyer.
- Once the seller has accepted ensure you explain each clause to him.
- 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 he thinks he may lose the deal.
- A note of caution: never let the seller know that the buyer is ‘desperate’ for the house as he 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 he knows you are on his side.
See clause 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 a sale. Rather get him to propose HIS 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 he takes 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. additional R10 000 = +- R150/m – however, keep in mind what the purchaser qualifies for.
- Appeal to the purchaser’s “fear of loss”.
Seller influencing factors:
- If he has a lot of interest in his property, chances are he 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 a 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 he has made is fair and market-related. It would be very difficult to then justify the higher counteroffer. Therefore, best always to say nothing!!
Try not to split the disputed amount exactly in half-remember you are working for the seller, so he needs to feel he is getting more. It is also better to draft the counteroffer on a separate document & get the seller to sign. That way the original stays valid till the expiry date.
ONLY AS A LAST RESORT – negotiate your fee but NEVER USE YOUR FEES TO BARGAIN WITH!!!!!