If you’re looking to take advantage of the current property buyers’ market you’re going to have to become a good negotiator.
Sure there are more motivated vendors around at a time when there are fewer buyers vying for the properties for sale, but there will be two things working against you.
1. You’ll be dealing with an experienced negotiator – a selling agent who’s probably spent many hundreds of hours training to be a good negotiator.
2. While there are plenty of properties for sale, there’s still a shortage of A grade homes and “investment grade” properties on the market and you’ll be competing with other motivated buyers.
So here are a few tips to help along the way.
1. There are three numbers you need to understand as you formulate your negotiation strategy
Therein lies another lesson – you must formulate a strategy before you begin any real estate negotiation.
Anyway…you need to understand…
- What is the current market value of the property based on (very) recent comparable sales and taking into account the future direction of the local market?
- What is the property worth to you? If it is an ideal new home for your family you may have a different perspective than if it is going to be an investment.
- What’s it really worth to the vendor, what are their expectations? Are they holding out for a premium price or are they motivated vendors?
2. Try to establish why the vendor is selling
Sure, the selling agent may not be forthcoming if you ask directly, but it’s still worth asking.
Otherwise you could ask a few pertinent questions that may could give you a clue – like – “What settlement suits your vendor?”
A short settlement may indicate they’ve already bought a property and they could be under time pressure and keen to negotiate
A longer settlement may mean the vendor is still looking for their next property and may even accept a lower price if the settlement terms give them flexibility.
They may even prefer to rent the property back from you for a short term while they’re house hunting.
3. How long has the property been on the market?
While some properties don’t sell because they’re in secondary locations or poorly presented, in this market only properties that are prices well are selling.
So if the property you’re keen on has been sitting for a while it may give you some bargaining power with the price.
But don’t make the mistake of buying a dud property.
A cheap secondary property that no one wants today will be a cheap secondary property that no one wants in 5 years’ time too.
4. Consider employing a professional to negotiate on your behalf
As I said, you’ll be dealing with an estate agent who’s a trained experienced negotiator, so it’s your responsibility to even the odds.
And in today’s market an experienced buyer’s agent should be able to save you a heap by levelling the negotiating playing field as well as taking the emotion out of the equation.
With all the property marketers, developers and agents out there looking after their own interests, it’s a great feeling having the independent team at Metropole on your side, working for you.
While you can do all the research you like on the internet, there’s one thing money can’t buy and that’s experience, so don’t be afraid to pay for the perspective of a property professional who could potentially save you thousands.
5. Care – but not that much
Don’t worry if you miss out.
Currently we’re still missing out on many of the properties we make offers on.
Maybe the eventual purchaser is smarter than us – or maybe they’re dumber than us.
Either way in the current market there’s no room for overpaying.
There are plenty of other properties on the market.
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