How to out-negotiate the buyer

Most people aren't going to offer you the price you are asking - even if they are actually willing to pay it - because they will hope to get something off by negotiating. Unless you are used to negotiating as part of your business life, or even if you are, it's best to do the negotiating through the estate agents. It's easy to get polarised. After all, it's your house, and therefore you, that they are insulting by offering less than you have it on the market for. Buyers dealing personally are liable to get aggressive, the way the British typically mishandle negotiations over carpets in bazaars. It takes all the shoulder-squaring and eyeballing out of the process if you pass messages via the estate agents. It also gives you time to think.

There's a good chance that the buyers will have confided in the estate agents to some extent -- buyers always seem to regard the estate agents as their friends, a feeling which estate agents naturally want to encourage. Buyers don't seem to appreciate that estate agents act for you, not for them. Buyers would never dream of telling you that they could go up another £10,000 if they really have too, but they might impart this information trustingly to the estate agent. The estate agent will then tell you. You can then instruct them to go back with a suitable counter-offer.

Equally, it is a good idea to keep your cards close to your chest if you can. The estate agent is acting for you, not for the buyer, so he will negotiate according to whatever instructions you give. But the nature of the job is to achieve deals, and the estate agent will be trying to get you and the buyers to arrive at a consensus. So it's best not to tell the estate agent what your bottom price is, or he will almost subconsciously be drawn towards finding a consensus between the buyer’s highest price and your lowest price. What you really want is that the buyer should be pushed up as far as possible, without you having to move down to meet him.

By using estate agents, the negotiating process can be handled over several days. If you are dealing with a seller face-to-face, snap decisions have to be made, and that's when you find you make concessions that you later regret -- such as throwing in all the furniture, or agreeing to a delayed completion period.

The absolutely worst thing you can do is to have a handshake deal with the buyer direct. That tends to turn what is in fact a commercial deal into something to do with honour and word, and you will be accused all kinds of moral wrong doing if you later need to alter the terms at all. (On the other hand, you can be the one getting righteously indignant if the buyers later try to reduce the price.)

Hold your nerve

Do not rush to accept the first offer you get. If it is less than your offering price, then wait for a few days to see what other viewings bring. (On the other hand, if it is definitely a “buyer’s market”, and if you have waited for a long time even for that first offer, then discuss it with the estate agents and accept it if they think it is a good offer.)

If you immediately get on offer at the asking price in, or if the buyer makes a lower offer that is easily pushed up to the asking price, you must consider whether you have under priced the property. Don't feel you have to accept an offer just because it's the price you are asking. See what a few viewings brings in. If it is clear that several people are prepared to pay the asking price, then you should seriously consider upping the price. It may be that when you saw the estate agents before you put the property on the market, some suggested high figures, other lower figures, and you put the property on the market in the middle or near the lower end. If so, it just proves that the higher figures were possibly the correct ones.

You are not doing anything wrong if you don't accept the offer and put the property back on the market at a higher price. Gazumping only occurs if you accept an offer and later pull out and go for a higher price. I don't think there's anything wrong with gazumping either.

How to negotiate with buyers.

There are some basic first steps. Never say to viewer as he is heading for the door "So, do you like it? Are you interested?". Never tell a viewer you are desperate to move because you've already bought another property, or you have to get your daughter into a new school, or you are about to leave the country. The overriding rule is that you should be seen to be cool. If the estate agent rings the viewer back after he has been round the property to ask if he liked it, that just seems a natural part of his job. Of course he will be doing it in order to report back to you

The buyer is almost bound to make an offer below the asking price. Once the offer comes in, don't respond immediately. Let the buyer sweat. If you're worried about the buyer disappearing, bear in mind the buyer may be just as worried that you might sell to someone else. So leave it till the next day, and then tell the estate agent to go back with any counter offer.

One tactic I rather like, is to go back with a counter offer which is only a very very small amount below your original asking price. Negotiators expect parties to start splitting the difference. If a buyer puts in an offer £10,000 lower than the asking price, it is tempting to split the difference and go back at £5,000 less, and then he offers to split the difference, and you do a deal at £7,500 off the price. But that is allowing the buyer to set the parameters. If you go back offering, say, £1,000 off the price you reset the rules of the game and make it clear that any reduction is going to be minimal. The chances are that the buyer will accept your bluff and settle for £2,000 off the price.

It's probably a good idea not to tell the estate agents quite how far you are prepared to drop. Take the agent's advice into account, of course, but then tell him what figure you authorise him to go back out. Tell him that there is little room for manoeuvre beyond that, and he should continue showing the property. He will pass all that back on to the buyer and that will put pressure on the buyer. If you tell the estate agent you are in fact prepared to drop £10,000, he won't tell the buyer, but he may give the impression that there is further room for negotiation. You really want your agent to be your agent not your arbitrator.

In fact, you might hint that you are going cold on selling and rethinking the whole home move, or your partner wants to stay, or just give the impression of being highly erratic. The chances are the esatte agent will pull out all the stops to get the buyer just to accept the offering price.