QUESTION: What’s more important, Local Knowledge or Negotiation Skills?

This is one that we get asked a lot, and we always put it back to the person as if they were the buyer.

If you’re standing in an open home with no one else around, you figure there’s no one else really interested at the moment. So, you low ball the agent. The agent tells you that they know a property around the corner that sold for 20% more, so, you’ll need to increase your offer, do you automatically just agree and increase it? No, because the law of supply and demand dictates that since no one else seems to be interested in this property, it doesn’t matter what anything else sold for, you can get this one for less.

Most agents will tell you

As a seller, that being local and knowing all the buyers is an absolute must, and the fact that they grew up in the area gives them an edge over all the other agents. This theory comes from the old days, when dinosaurs roamed the earth, and if you wanted to buy a property you needed to walk into a local agency and go through a physical book of properties to find one that you like. These days, there’s a little thing called the internet, which if you haven’t heard of it, can get any information to literally anyone. We think the technology is really going to take off soon.

Try this quick test

A quick test – tell the selling agent that you have another property a few suburbs over that you also want to sell, we’ll bet that suddenly being local isn’t such a big thing and they can also sell that property for you too. 

What this means for you as a seller, is that if the property has been marketed well, and the real estate agent can make the buyers feel like there’s a demand and a sense of urgency, they’re compelled to put in a strong offer from the start. This is a simple equation: the better the marketing, the more people come through the door, and the more competition there is at the negotiating table. 

Negotiation is about leverage

Don’t forget that negotiation is about leverage, and a bluff works well until it doesn’t. The only way to guarantee that you get the most for the sale of your home is to make sure that the most people are engaged, giving you multiple offers or Auction bidders to drive competition. 

So, what’s most important, Local knowledge or negotiation skills? That’s up to you.