Understanding prospective buyers can put the emotion back into property buying

For the last three years our property markets have been in a state of confusion. What confuses the issue further is that everyone for some strange reason wants to buy in a vendors’ market yet they don’t want to engage in a purchasers’ market. It is well documented that Australians will take a punt on two flies climbing up a wall – yet there is no interest when there is just the one. I guess the reasoning is with two flies they are guaranteed an outcome yet with the one the interest wanes.

Years ago I remember reading a quote on negotiation by Howard Baker “The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts. And there was a considerable challenge to that here and understandably so.” Residential real estate is an emotional acquisition, although in difficult market conditions the emotions are removed, with the decision-making process then becoming much more commercial.

So how do you get the purchaser’s mindset from commercial back to emotional in a difficult market?

The market doesn’t determine the sale price; it only sets the parameters for the sale price. My brother developed the PEAK model, which identifies techniques for dealing with the four basic types of human behaviour.

P – Progressive

E –Endearing

A – Analytical

K – Kaotic

It is only when a real estate agent can characterise a purchaser using the PEAK model that the task of communicating with them (on their level) that you then become in a more informed position to take control of the negotiating process. Every purchaser is dominated by one of these categories, so it is important to remember that a great negotiator negotiates first with their ears and eyes – not their mouths.

A “Progressive” purchaser is a risk-taker, innovative, daring, demands efficiency, will confront, is direct and result- oriented and has a high ego. Prepare to negotiate, brevity is the key, flatter this buyer, provide more options and less opinions, close confidently.

An “Endearing” purchaser is shy, quiet patient, traditional and family-oriented. This buyer requires time to think. Agents must earn their trust. Give full explanations. Don’t denigrate the opposition. Needs lots of visits – be patient.

An “Analytical” purchaser is conservative, suspicious, non-personal and avoids risks. Do not rush this buyer, hard sell, exaggerate or threaten. Answer all questions before closing. Provide plenty of anecdotal market data and comparable sales.

A “Kaotic” purchaser is a great creative thinker, expressive, impulsive and undisciplined. Support their dreams and aspirations, allow time for socialising. Don’t lose them in facts and data. When ready, close quickly, be enthusiastic.

Of course in the majority of negotiations a purchaser can be multiple so each party must be assessed individually. Too often real estate agents focus too much on the market conditions as against the modus operandi of the purchasers.

Everybody fits into the PEAK model, and that includes vendors, too. You will also discover that you too are described in the model also.