The art of negotiation in a buyer's market

Many agents may perceive that the need to negotiate only comes into play at the point of offer if a property has potential issues. Moreover, many simply haven’t needed to negotiate a great deal over recent years in terms of achieving the best price for the seller or landlord. Equally from a recruitment perspective, it doesn’t appear to be a particularly ‘sought-after’ skill.

Agents know that negotiation needs to ‘kick in’ at certain points during a transaction, in terms of agreeing on price reductions or getting offers increased. But – on the face of it – it doesn’t seem to be essential. I’d even go as far as asking whether this is a skill we have forgotten we need altogether?

However, I believe it is one of the most important and fundamental skills an agent should have. Everything they do is based around their ability to negotiate - whether that’s working to find the right buyer, to get the best possible price, or manoeuvring the various aspects of the Material Information legislation.

In the current buyer’s market, where sales fall-throughs are running so high, agents are missing out on vital fee income. Homing in on and remembering their negotiation skills could help to change the status quo.

The art of negotiation

Good negotiation is an art. It’s about having the ability to see the bigger picture, and then acting upon relevant opportunities as and when they come along. Successful negotiation takes real skill, and when mastered will give the agent absolute confidence. As an example, if a buyer wants to view a property, the agent should have no hesitation in saying: ‘My advice would be’ and look at all other potential properties. At all times they should appreciate the fact they have a buyer that has complete trust in their abilities. Relationships in property are best if based on absolute trust in expertise.

It's not just reactive

Negotiating is not about just being reactive, for example, waiting for offers to come in. Instead, agents need to be prepared to be truly proactive and to try to encourage those offers, rather than anticipating them. Even if they believe the bids could come in too low - particularly in this current climate.

Perhaps somewhere isn’t a buyer’s dream home, but they could be getting it for a good price. This presents the time for the agent to act and address the alternatives in a positive light, retaining their extensive local knowledge, helping to keep the lines of communication open and preventing potential withdrawals at a later stage.

At this point the buyer may also have to negotiate with their own wants and needs - perhaps together as a family. As I said before, everything in this industry is based on negotiation, and being able to compromise.

Developing strong buyer relations to overcome objections

It is vital for agents to develop relationships across the chain, especially with potential buyers. Garnering viewing feedback is now more important than ever. Agents need to be asking questions such as: How urgent is the move? Or how far up is this property in your top five?

The next step is to look at overcoming objections. What is stopping the potential buyer from putting in an offer? If, for example, affordability comes into play, then the agent should be arming themselves, and looking at how they can gain access to mortgage advice and support, with the aim of supporting the buyer as much as possible. The buyer needs to trust you’re an expert in your market.

At some point in their career, every agent will have had a surprise offer made by a potential buyer, which was then subsequently accepted. I’d argue that they should be taking this learning with them and adopting a proactive mindset - turning that energy into a question perhaps, which may then provoke an offer.

In essence, the more knowledge an agent has about a buyer, the more likely the buyer will see them as hugely helpful and a real asset in their journey to finding a new home. Indeed, I’d go as far as saying that the majority of savvy buyers work hard to develop relationships with knowledgeable and trusted local agents and property finders, and often this ‘trusting’ approach will really pay off.

Agent-to-agent relations

I believe it is also good for agents to have strong conversations with other agents because they need to be armed with as much information about their chain as possible. And, given only 50% of transactions resulted in income for agents in 2023, I’d advise this has become more important than ever.

The law expects us to act on behalf of the seller

Everything addressed above covers the start of the process. When in the midst of negotiations, the agent is then acting firmly for the seller. They must maintain proactivity right up to the memorandum and instruction of sale, armed with the extensive buyer knowledge to help give the seller the cards to play with – continually demonstrating their skill and expertise.

It’s important to also be mindful of the seller’s position. There are those who don’t want to sell their properties in a public way, instead preferring low-key marketing. These types of sellers will have even more reliance on their agent. In this instance, there will be a real focus on the quality of conversation the agent has with the seller and how they are able to identify the right buyer for the property in question. We’re even seeing some agents setting up bespoke services to support potential buyers – recognising that opportunities will exist.

Of course, when the offer does come in the art of negotiation doesn’t stop. Through the offer and counter-offer the agent needs to recognise that this is a legal process which needs to be followed with due skill, integrity and care, whilst continuing to act in their clients’ best interests.

To learn more, visit https://www.theableagent.co.uk/courses/negotiating-a-sale/.