Elevated vendor expectations to rise

Elevated vendor expectations to rise

06 March 2014 by Steven Cross 0 comments

Agents will need to facilitate greater negotiating between buying and selling parties as the year progresses, according to the heads of two franchise groups.

According to Charles Tarbey, owner and chairman of CENTURY 21 Australasia, the vendor/buyer relationship is beginning to shift in a way that will prove favourable to agents.

“All this activity in the property market is getting vendors excited,” Mr Tarbey told Real Estate Business.

“So when vendors are given a price of $650,000, because they’ve heard about the property market being in a ‘boom’, they expect no less than $700,000.

“The art of negotiation really comes into play when a good offer is received from a qualified buyer and the agent has to bring the vendor's expectations down to reasonable levels.

“To make the most of this change in attitudes, agents must act as the platform for mediation.”

Reports of a more active market over the Christmas and January period have contributed to sellers expecting exorbitant prices

According to Doug Driscoll, CEO of Starr Partners, negotiating a more reasonable price shouldn’t be left up to ‘feelings’ of the market.

"I've been seeing this happen for a few months now. It's frustrating because as agents, of course we'd love the higher price too, but it's just not going to happen.

“But you can’t go to the vendor and say ‘I don’t think it can happen’, you need to come with hard facts and data and say ‘Mr and Mrs Vendor, I understand that’s what you are expecting for your property, but the reality is that the market will only pay this much,” Mr Driscoll said.

“These conversations can’t happen over the phone or by email, you need to get belly to belly with them and show them that a property is only worth what someone will pay for it.”

While this firmer attitude towards vendors may be out of some agents' comfort zones, Mr Driscoll believes it is necessary.

“You can’t sugar coat this; you need to go in with your data and figures that prove you’re the expert in your area,” he said.

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