With just 15% of buyers putting in offers at full asking price in 2016, when it comes to selling a house the art of negotiation is becoming increasingly important. Knowing which category of buyer you are dealing with can help you get the best price.
In 2016 two thirds of buyers and sellers failed to agree a selling price. As such, the buyer walked away leaving the seller having to begin the process all over again.
So what can sellers do to help themselves sell quickly and at a great price? The most important aspect in any negotiation is to find a common ground where a buyer and a seller can reach a compromise that leaves both of them happy. Although price is obviously the most important aspect, other factors, such as, who the buyer is, their financial positon and their purchase timescales, can all have an impact on agreeing a deal. However, negotiation is a very personal thing, all homes, and for that matter all buyers, are very different and therefore so is the style of negotiation.
On average a home is usually on the market for 11 days before an offer is received and in the vast majority of cases (71% in 2016) this offer is rejected. This propensity to reject the first offer is even more prominent in London with 82% turning down the first offer in 2016.
So is this desire to hold out for a higher price the right tactic? In most instances it is. 78% of UK vendors who rejected an initial offer ended up selling for more money. However, this is most likely to happen only if it is the same buyer returning with a higher offer. If the initial buyer walks away, the chances of a seller negotiating a better deal with an alternative buyer drops to 61%. As such it pays to engage buyers, especially the ones that are first to show a dedicated interest.
Who are these buyers and can they be categorised? The good news is yes. The one thing that unites them all is a desire to strike a deal. Whilst all buyers will have desire to pay less, they will also be keen not to offend the seller or miss out on the property, especially in an active market. In slower markets, negotiations are tilted in the buyers’ favour, whereas in a demand led market, where supply is short, sellers hold the upper hand.
But whatever the market conditions, negotiations can be more successful if a seller knows which type of buyer they are dealing with. Naturally there is a hierarchy of buyers with those who can pay cash sitting at the top, and those with a low deposit and who are part of a lengthy chain at the bottom, however there are also distinct styles of negotiation that can make a huge impact on striking a deal. Almost all buyers fall into one of the categories below:
The chancer – 25% of buyers
Name: The chancer
Description: The largest group of buyers makes just a single, close to asking price offer on a home. While they’re successful around a third of the time, they walk away if they’re not. 2016 habitat: The Midlands Likely 2017 habitat: The South
The Chipper – 19% of buyers
Name: The chipper
Description: The chipper makes a series of close to asking price offers, increasing in ever smaller steps as they get closer to what the seller of the home is looking for. 2016 habitat: The South Likely 2017 habitat: The South
The Peacock – 15% of buyers
Name: The peacock Description: The peacock makes the most of their non-financial assets (babies, first time buyer status etc) to tug at the seller’s heart strings. 2016 habitat: London Likely 2017 habitat: The Midlands
The Angler – 13% of buyers
Name: The angler
Description: The angler makes a very low opening offer to see if the vendor takes the bait before upping their offer to a more competitive level. 2016 habitat: The Midlands Likely 2017 habitat: London
The Jitterbug – 11% of buyers
Name: The jitterbug
Description: The jitterbug makes a series of increasing offers before withdrawing their best and final, in the fear that they’re paying over the odds. 2016 habitat: The North Likely 2017 habitat: The South
The Wheeler Dealer – 8% of buyers
Name: The wheeler dealer
Description: The wheeler dealer makes a single low offer on a whole host of different properties at a similar time in the hope that one of them will be accepted. 2016 habitat: The North Likely 2017 habitat: London
The Bulldozer – 5% of buyers
Name: The bulldozer
Description: The bulldozer falls in love with a home and refuses to let anyone or anything stand in their way. Rival bids are met by a flurry of punchy counter offers. 2016 habitat: London Likely 2017 habitat: London
The Thinker – 4% of buyers
Name: The thinker
Description: The thinker is in no hurry to make any decisions. A week of waiting sits in between a rejected offer and a subsequent higher one. 2016 habitat: The North Likely 2017 habitat: The North
If you are keen to sell this winter it will pay to take the time to analyse your buyer to get a understanding of how they are likely to proceed and at what point it is right to accept an offer.