15% under asking price, how would you feel about selling your overseas house at this reduction?
15% is the sort of price reduction a buyers will try to achieve when they enter a negotiation on an overseas property, in some cases even more. So how is the best way to handle the negotiation of the sale/purchase of your villa or chalet?
Read on for lots of helpful tips for buyers and vendors on how best to negotiate a private sale.
Whether using an agent or negotiating directly between buyer and vendor, here are some pointers to get you to the point of sale without getting emotional or stressed and to acheive the best possible price.
- Buyers - do your research. Find out prices of other properties in the area, run some comparatives, find out how long the vendor has been trying to sell, find out their circumstances for example - do they need a particular amount from the sale to purchase another property, what did they pay for the property, estimate how much they have spent on the property, is the sale of the property their pension fund? All these factors should build up a picture of what they need to take from the sale.
- Vendors, be prepared that first offer could be on the low-side, well in fact pretty much guaranteed it will be on the low side, but don't be offended, keep your calm, this is just the start of the negotiation.
- Buyers, a word of warning, don't submit a truly offensive offer. Yes we understand you want to try your luck but making a really low offer which you simply know will not be accepted could create really bad feeling between you and the vendor. Bear in mind that at this early stage of the negotiation there is a LOT more to discuss and agree so best not to create bad feeling unnecessarily.
- Get the terms of the offer right. Before reacting to price level of the offer, look at all the other terms of the offer. How quickly can you go under contract? Are deposit payments being offered? If so, are they a decent percentage of the sale price? Have the buyers already appointed a lawyer and/or notary? Has the buyer already done their due diligence (surveys, searches etc)? If the offer price is low but the buyer has done a lot of the above work already and can move swiftly, you would be wise to take the offer more seriously.
- Vendors, once you have that offer, find out as much as you can about the buyer, in the same way that we've suggested that the buyer do their research on the vendor pre making the offer. Build a picture of the buyer's circumstances, personalities and their profession/s. The aggressive entrepreneurs out there are more likely to try a really cheeky low offer, the lawyers however are more likely to present a carefully thought-out ‘one-hit’ offer.
- Check out the buyer's financial circumstances. Ask up front, even at viewing stage, if they are reliant on taking a mortgage and if so have they already got that financing agreed in principle or are they yet to investigate whether they will qualify for an overseas mortgage. Overseas mortgages can be difficult to secure and foreign banks from one month to the next can change their policies on offering foreign clients mortgages. If you are not certain of the buyer’s status or ability to proceed with the transaction, don’t hold back asking for proof of funds. Buyers, attaching a proof of funds and mortgage agreement in principle to your actual offer will no doubt strengthen it and build confidence. If a buyer is not prepared to present proof of funds, this raises questions....
- Act quickly, you would be surprised how quickly enthusiasm and commitment can wane. If the price and terms are acceptable, call your lawyer and get that contract signed and in place within maximum 48 hours. You can always have that first contract subject to various conditions, allowing time to run checks, agree on fixtures/fittings/furniture etc but the fundamentals are agreed and enthusiasm hooked.
- Stand by your asking price. If you’ve recently reduced your price and you receive a low offer, don’t be disgruntled by the low offer. It was your choice to lower the price and it is the market that dictates the levels of offers likely to be received.
- Try not to get emotional, or at least, spare a thought for the buyer’s state of mind too. It seems that all vendors in a negotiation go on the defensive, putting up a great big guard. The times you hear ‘we don’t need to sell’. Maybe you don’t need to sell but if you have decided to put your property on the market, take any offer seriously as you don’t want to be kicking yourself 2 years later that you turned away a real buyer.
Whether you are selling through an agent or directly, these are all points to consider. The agent only passes messages between the parties. Agreeing a sale is simply down to being reasonable and courteous – keep these two words in mind and anyone can sell their house. Can you be reasonable and courteous then why not try selling direct for 0% commission. Learn more at www.the-viewing.com