Would you like to be a better negotiator when it comes to selling your property?
It’s really not as hard or mysterious as you might think.
Being a good negotiator comes down to cultivating the right mindset and making particular moves in response to particular situations.
In many ways negotiation is no different whether you’re doing it through an agent, or doing it yourself directly with buyers. But there’s a real benefit to engaging with the buyer directly: You can hear exactly what the buyer says and how they say it.
Here are some simple tips that will get you negotiating like a pro:
Think win win – Don’t go into the negotiation hell bent on winning. It’s not about winning or losing. A successful deal occurs when both you and your buyer get what you want.
Determine what success looks like – Before starting to negotiate, establish a price you will be satisfied with. But don’t think in terms of an absolute number. It should be a range together with an itemized list of essential items and non-essential.
If your idea of negotiations is to price high so you have room to lower, there are several problems with this view:
One, San Juan del Sur is a buyer’s market. A home priced high will be ignored. That means your home sits on the market and costs you money.
Two, negotiating is often more than just about price. You can make concessions without having to lower the price (see ideas below).
Keep calm in the face of low ball offers – If the first offer is low, don’t be affronted (even if it comes with a host of reasons why you should accept it.) Often this is what buyers think they are “supposed to do”.
Keep communications open and make a counter offer, no matter what. You never know who the buyer may be and what offer they are finally prepared to make.
Take your time – Don’t feel you have to answer every question immediately. Remember you can always say “I have to discuss that with my partner/spouse/co-owner and come back to you.” This gives you time and takes the pressure off.
Understand buyer interest -Try to understand your buyer’s ultimate interest. This helps you improve your leverage. If they love your property, you have some leverage. If their time frame is immediate, and you can meet it, you have some leverage. Are there any secondary needs you can meet? If so, you have some leverage.
Take your emotions out of it – You may love your home and the memories you’ve collected over the years. But unfortunately, those memories mean nothing to buyers. In most cases, this transaction is a little more than business to them.
Find space to think – You make an offer, the buyer counters immediately and you’re not sure what to do next. Do you need more time to think? Is there something you are missing? Probably.
Tell the seller you need to consult your partner, or your lawyer or you have a pressing appointment that you need to take care of. Anything that gives you the space to think.
Change the negotiator – If the negotiation has got stuck, or has become heated it’s a good idea to bring in another person. This works great if you are not the only owner of the property, but you can also bring in a mentor, friend, partner as a second negotiator. This has the effect of resetting the rules and starting over.
Lower your price without actually lowering your price – There may be times when you have to sweeten the deal; especially if you are dealing with a dispassionate investor. But before you lower the price, consider ways of structuring the deal so that it’s more attractive to buyers. Let’s consider some “incentives” – they’re a great way of “lowering your price without actually lowering your price”.
- Are you willing to cover some of the closing costs? In San Juan del Sur it’s customary for the buyer to pay the transfer tax (even if the law suggests otherwise). But you could decide to cover this or other closing costs.
- Can you grant an extension of time to close the deal?
- Are there any lifestyle amenities that you can sell with the property? A surfboard? A plasma TV? Even your car? These are all great incentives that will help your buyer pick up where you left off. The mindset here is not just about selling a home, but also selling the lifestyle that goes along with it.
- Are you in a position to offer financing? In Nicaragua foreign buyers wont be able to get financing from local banks. So if you can finance a portion of the deal, you property will stand out. On the flipside, you could offer discounts for cash buyers. (We’ll be covering the legal aspects of Seller Financing in a later email.)
- Offer a trial run. Vacation home buyers often stay in a hotel while they’re looking for a property to purchase. Offer your home to potential buyers for a nominal fee. You could even formalize this into a lease with the option to buy. This gives your buyer more time to collect together the funds they need for an outright purchase and in the meantime they can rent your home.
- Share your resources. For many vacation home buyers, the thought of finding service providers in an unfamiliar area is daunting. Mention that you have housekeepers, maintenance workers, or property managers that are trust worthy and already know the ins and outs of the property.
Agree the deposit amount and timing – A 10% deposit is standard in Nicaragua. This is typically non-refundable if no problems have been found during the due diligence. Make sure you have a local attorney or third party you can trust to keep the deposit. Or use a reliable escrow service.
Be ready with a Sales Contract – Your job isn’t done when you accept an offer from a buyer. You still need to prepare a Sales Contract. This sets out the responsibilities for both parties, the details of the deposit, conditions of sale, and terms of the transfer.
You’ll find dealing direct with buyers places you on a level playing field. You are empowered with all the information. There are no games.
Thanks as always for your time and attention.
