As the managing director of Visionary Finance, I’m struck by the parallels between encouraging my clients to get a good deal when negotiating a property purchase and the need for the UK to stand firm in its negotiation of a good trade deal when leaving Europe.
I’ve been involved in the property industry and financial services sector for more than 15 years across various business interests and there are a few things my experience has taught me - one in particular being the art of successful negotiation. In any negotiation, it is important to consider what the opposing side’s motivations might be. In the case of negotiating for a property purchase, if the seller is an owner/occupier just wanting to test the market then they won’t be looking to negotiate on price. If however, they are motivated by a change in their personal circumstances, they are more likely to be flexible with their price and more willing to negotiate. It is always wise to enquire with the estate agent as to the seller’s situation before proceeding.
The simple fact of a negotiation is that it is a two-way street. Both sides stand to gain so there will be a mutual appetite to compromise and reach an agreement. The same is true for UK’s Brexit negotiations. UK’s intention is to continue its trade relationship with Europe after it has left the EU and given the size of our trading partnership both the EU and UK stand to gain from reaching an agreement - if it is handled well.
According to the Telegraph the UK’s net contribution to EU membership is £35 million a day. With this income no longer continuing, Europe will be looking to make up the difference from trade. The Observatory of Economic Complexity notes that the UK has the ninth largest export economy in the world with its top export destinations as the US, Germany, Switzerland, China and the Netherlands; and it is the fourth largest importer in the world with its top import partners as Germany, China, the US, the Netherlands and France. Europe stands to lose a great amount if it fails to reach an agreement with UK in the Brexit negotiations, Germany alone would lose a trading partner that buys €83bn worth of its goods annually and supplies it with €35bn worth of goods, France too exports €33bn to Britain each year. By anyone’s standards, that’s a good trading relationship and shows that there is an appetite on both sides to reach an amicable Brexit deal.
For negotiating and securing a good deal, you should never show your cards. If both parties understand the benefits of a deal then negotiations will run smoothly, however if one party feels the other ‘needs’ the deal then it is quite another matter. That is why you keep hearing the phrase ‘no deal is better than a bad deal’. The results of the General Election won’t change that we need to unite as a country. In the negotiations, the UK has to show Europe that no one has the upper hand and that we will all be worse off if the EU decides to punish the UK particularly given that an overall majority has not been achieved. It is also now even more important that we strongly pursue developing global trading relations with the likes of China, India, US, Canada and Australia and demonstrate that we will not be held over a barrel during the negotiations and that we do have meaningful and strong alternate trading partners.
The same is true for property, as soon as an estate agent knows you are keen they will instruct the vendor not to waver on the price. Negotiations are always helped when there is a fear of loss and so if the agent believes that you are considering a few other purchase options, they will work hard to persuade the seller to agree a price. Never disclose that you are prepare to deal a deal at whatever cost, stay firm, show them that no deal is preferable to a bad deal and that if they aren’t prepared to reconsider the price then you are happy to walk away - you will be surprised how many vendors will be willing to negotiate to reach a deal that is good for everyone.