Are you asking the right questions?
Originally published on Linkedin.
As we all know, the property market is a highly competitive one, and the typical property will get five, ten, twenty, if not more offers before one is accepted. If you’re rejected on the first property that you make an offer on, then you’ll probably not think twice about it. By the time you get to your tenth offer rejection, however, you’ll likely start to wonder what’s going on.
We’ve helped many people that have reached this point at Hello Haus, and understanding the causes of rejected offers is something that I spoke about recently on the Pizza and Property podcast. What causes a lot of people to miss the mark with their offers is how little that offer is tailored to the vendor’s needs and interests. The reason for that is that the buyer hasn’t asked the right questions.
What vendors want
Whether you’re negotiating with an agent, or the vendor directly for a private sale, you want to make sure you’re asking the right questions to understand what offer the vendor will be most receptive to… and understand that it won’t always be about the money.
Questions to ask include:
- What is the ideal deposit size, and will they need a deposit release? Are the sellers planning on purchasing an onward property?
- How are you (the agent) going to run the sale process? Will you shop my offer around openly, are the offer amounts kept private, will there be a cut-off date for any better offers?
- Is your client ready to sell today if you make an offer that meets their expectations?
The more you understand about the vendor’s motivations and plans, the better placed you’ll be to reduce and streamline the conditions of the offer, and present something that looks and feels targeted to the seller. As an added benefit, doing this can save you on expensive inconveniences, or even help reduce the price you pay – your highly targeted and specific offer may well be taken over a larger offer that doesn’t account for the vendor’s motivations.
Questions to ask yourself
The flip side to the coin is that there are a series of questions that you should be asking yourself, too, and the answers can affect whether the offer is ultimately successful:
- What’s the walkaway price? This should be a number that you can confidently go to but would also ensure that you’re not paying an emotional premium in negotiations.
- Can you make an offer that is unconditional on finance? This is a big one. With so many offers being made on properties, the easiest way for vendors and agents to cull the potentials down is to simply bin the conditional offers. There’s no way around this; in most markets in Australia, you need to work yourself into a position where you can make an unconditional offer.
- How hard will it be to replicate this property if I miss this opportunity? This forms the basis of how far you push the offer amount.
Knowledge is key to the offer
Many customers come to me once they’ve realised, on their 2nd, 4th, 8th attempt (if not more), that they’re just not equipped to get the right answers from vendors, or how to secure a property in a competitive setting. They’re often amazed at just how quickly I can secure their next attempt, and it’s simply by applying the above questions and then building a targeted strategy that uses the answers in a feedback loop that ensures that we’re hitting the right notes for the seller.
Too often, we see people that have the means to buy their dream home lose out on the offer because their research started, and finished, with the property value. Getting in early, avoiding the auction, and ensuring that you’ve got the most compelling offer means having more information and being sure that what you’re presenting to the vendor shows that you understand more than the dollars involved.
Need help structuring an offer? Talk to us at Hello Haus today!