Nietzsche once said that “Convictions are more dangerous enemies of truth than lies”. This is a brilliant insight as to why many people are their own worst enemies. We all have beliefs. Unfortunately many of these beliefs are not based on facts.
We may laugh at the fact that people once believed that Earth was flat or that humans would die if they travelled at more than 20 MPH (the theory was that it would be impossible to breathe and therefore the invention of the train or any other “fast” vehicle could only be used for cargo).
It was also believed that man could not run a mile in under 4 minutes. Of course, Roger Bannister famously cracked this record at Iffley Road. The interesting point about this was that once he had done it, the 4 minute barrier was broken over 30 times within a year. The psychology behind this is fascinating.
What has this got to do with buying property in London, you may ask? Well it is amazing how many buyers believe that negotiating large price reductions is impossible. They simply see an asking price and “experience” tells them that they will never be able to achieve a 25% (or whatever the figure may be) price reduction.
But what is this conviction based on? Frequently on absolutely nothing relevant, so opportunities are missed. Now I am not suggesting that you simply offer 25% less on every property you see. This would likely be counter-productive as the agents would assume that you were time-wasters and stop showing you the best properties.
No, what you must do is discover all the facts about the property and the sellers. For example:
– What is the fair value for the property?
– How many other similar properties are available?
– How many buyers are in the market for this type of property?
– How many buyers know about this particular property? (the number is often lower than you would expect)
– Why are owners selling?
– What would make my offer more attractive?
This is just a very brief list of questions you need to ask. Information is power in negotiations. Your convictions are of no use. Only the facts are. Once you have these, then you can decide on the best strategy for the negotiation.