The art of the deal: How agents can negotiate better

According to Papas, seeking to align with a vendor’s terms and conditions was just as beneficial as achieving high sale prices, while managing expectations helped avoid disappointment and boost satisfaction.

However, he said that transparency underpinned successful negotiation sales, allowing both buyer and seller to know a property’s true value and potentially increasing sale prices.

Here are his top tips for negotiations:

Not just about price

Papas said agents should remember that a good negotiation isn’t always about maximising the sale price, but about achieving the seller’s terms and conditions.

According to Papas, an agent can help achieve a seller’s terms, boosting their satisfaction and increasing their trust in the industry.

“There are two parts to negotiation; one is price, the other is terms, which are settlement terms, deposit terms, early access terms, all those types of things,” he said.

“Terms of a contract can really determine negotiation as well, not just price.”

Papas added that the terms may also include selling off-market if the seller didn’t want to go through the process of hosting open homes and inspections over a few weeks.

“Sometimes buyers say, ‘hey, we love the fact that we know what they want and that’s fine, we’ll pay that if we just don’t want to go through the rigmarole of an auction process’.”

“Just come back to where the buyers and the sellers are feeling comfortable in that sweet spot between the two of them.”

Papas said there were rare situations when sellers wanted to settle for a lower price than they could achieve, but agents needed to remember the decision was ultimately up to the client.

“There was a recent situation where an owner sold to a buyer because of their personal circumstances, and the owner took a lower price and then we had a higher offer.”

“It can happen based on people’s personal preferences. Sometimes at the end of the day, I always say to owners, we can’t choose the price, we can’t choose the buyer, but you can.”

Managing seller’s expectations

Aside from listening to all of the seller’s terms, Papas said it was also important to manage their expectations to avoid disappointment.

He said that from the beginning of the sale, he would sit down with the sellers and tell them what the outcome might be.

“We’re either going to achieve a dream price that they may have in their mind, we may not, we may sell before auction, we may sell at auction, we may sell after auction,” he said.

“We give them the scenarios as to why all those things happen, really framing the seller’s mind to what they’re looking to achieve and how we then also take offers to them.”

Papas also said it was essential to inform vendors to accept or reject offers, in a bid to achieve the best price and avoid wasting his and the buyer’s time.

He said that he wouldn’t simply accept a buyer’s verbal indication of price, but also see whether they were serious buyers who had done their research and were qualified to buy it.

“That would mean having an offer on a contract, having amendments made to contracts, having a pest and building report or a strata report conducted.”

“It’s just all about preparing your owners for how different offers will come in during the process of a campaign.”

“Sometimes it’s the terms that make people accept a lower price or a higher price. It’s not just about the price. Sometimes the terms are more important than the price.”

Transparency is key

Similarly to informing vendors about what to expect, Papas said transparency about the sale price allowed both buyer and seller to see the true value of the property and to build trust in the agent.

“Transparency always wins in any negotiation for the best of value to be achieved by a vendor, but also for a purchaser to feel comfortable in what they’re paying,” he said.

He said his agency allowed for transparent negotiations by taking most properties to auction, enabling the true market price to be publicly known and showing the demand for the property.

According to Papas, there were many pricing and data tools available for both buyers and sellers, enabling more efficient decision-making.

“There’s enough data for them available to realise that, okay, this is probably a fair value or a fair price.”

“You’ve got to remember that you need a buyer in a seller to make a transaction happen, so treat them both equally, show them transparency throughout the process,” he concluded.