I come across many myths surrounding negotiations, some of them really do make me laugh. On the inside atleast…
Here are some of the most common ones, just to clear things up.
The vendor will take 20k less than the asking
There is no rule around this. Pricing is a funny one, and it all depends on how accurately the property has been priced. Sometimes the property is Agent priced, sometimes it is vendor priced. Sometimes it is accurate, sometimes it is not.
I have heard of people going by this rule thinking that they are getting a bargain, when actually the property was overpriced by $50K and they just paid $30K too much! Take everything on a case-by-case basis.
The ‘Half way’ rule
‘If I meet them half way they should meet me there’. This sounds nice in theory but it is not true.
I have often seen people come in low balling $40K under the asking, then come up $20K expecting the vendor to drop down $20K because they came up $20K as well. Sorry, it doesn’t work like that.
I give they have to give
The classic ‘I’ve given something so they have to give me what I want’ thought process. Again sounds nice, but no-one has to do that.
Particularly if what you are giving is of no value to them.
What has the other buyers offered? You have to tell me
This is a classic question in a multiple offer situation. Along with ‘What conditions have the other buyers put in?’
Multiple offers need to be fair and equal. Everyone needs to have the same opportunity.
For that reason everything to do with the other offers needs to remain confidential, this includes price, conditions and who they are.
The Agent has to tell me… why they are selling
If you ask the Agent about the vendors situation expecting that they have to tell you anything about the vendors personal situation (at all), don’t expect the response you are wanting. I have heard them all – Why is the vendor selling? Are they getting a divorce? What is the mortgage? What did you assess the property to be worth? What did they pay for it? How much does the vendor owe? Is the vendor in financial trouble? The list goes on.
Anything personal to do with the vendors personal situation is strictly private and confidential. The Agent does need to tell you anything that relates to the property (land and building) but if it’s about their personal situation, basically it’s none of your business.
If an agent is releasing personal information about the vendor then they are in fact breaking the law.