If you want to get the best deal on a property, it’s going to take more than writing an offer and crossing your fingers it gets accepted.
Effective negotiation isn’t rocket science, but it does require knowledge, effort and a fair amount of patience.
Before you start offering purchase prices to agents, make sure you’re well prepared to barter for your best possible outcome.
Here, we’ve listed some of the essential tricks and advice that can tip the balance of negotiations into your favour:
1. Know the market
This is absolutely fundamental.
Research is key to getting the best price and conditions, as you’re able to negotiate with knowledge on your side.
Spend a few months attending inspections and comparing the advertised prices to the eventual sales prices, so you fully understand what a variety of property types are selling for in the market.
The more you know about a suburb’s price points, the better equipped you are to spot a bargain and know how to negotiate a price down.
2. Know the property’s value – and your maximum offer
In much the same way, you need to know a property’s value from the moment you walk in.
It’s a good idea to research comparable houses on the market, and be armed with that information during negotiations with the seller.
And of course, decide how much you’re going to spend on the property based on its value.
I don’t need to tell you how imperative it is that you stick to the limit: when buyers allow emotions to fuel their purchase price limit, they can end up biting off more than they can chew, financially speaking.
This is particularly relevant for auctions, where agents are counting on emotions to drive the price sky-high. Once the property hits your ceiling, walk away and look for the next one.
Believe me: there is always a ‘next one’ just around the corner.
3. Understand that agents aren’t on your side
This is not to say that real estate agents are working against you: the good ones generally work with you to reach a win-win outcome.
But it’s important to understand that selling agents are employed by the vendor, and thus the agent will push hard to get the highest possible price.
Be careful of the information you disclose; behave ethically, but don’t give them ammunition they can use against you (such as telling them you need to buy in the next 30 days).
If you’re not sure about facing off against a professional, you can hire an expert buyer’s agent to represent you and even up the playing field.
4. Give them an offer they can’t refuse
Property negotiations don’t always come down to price.
Often times, you can add more muscle to your negotiations by including conditions that make your offer more attractive.
If you can present a solution to a vendor’s problems, for instance, such as working out a settlement date that suits them, or on condition of them finding another property, you have a better chance of sealing the deal or being able to settle on a better price.
In addition, it’s good ethics to maintain a cordial and friendly approach in your dealings with vendors and agents.
Not only is it just common courtesy, but you never know when you’ll need to deal with that agent again.
5. Don’t panic into purchases
This is a mistake in negotiations that all too common.
Buyers are either pressed into rush decisions because of time pressure from their own camp, or because the agent says there are other serious bidders putting in offers.
A hot market is going to see competition; don’t be afraid to let the deal go.
If you’ve done your research and you approach the negotiations with a clear head and your eyes wide open, you’ll know the point when it’s time to walk away.
Snap-decision panic buying can lead to long months or years of regret.
6. Prep your finances
Pre-approval can give you a competitive edge over other buyers and more power in your negotiations.
A buyer who knows you won’t pull out because of financial issues will find your offer more attractive.
Similarly, make sure you’re ready with your financial team (your broker and your conveyancer) so you can move quickly when necessary.
Being prepared also reduces the risk of being rejected for a loan and missing out on a property.
7. Be confident and assertive
Just to make it clear, assertiveness is not akin to rudeness!
Just be self-assured in your dealings with the agent and seller.
If you know the market, have a maximum figure you’re willing to pay, and you have special terms that might help you achieve a lower price, go ahead and confidently play your hand.
At worst, you move on to the next property.
At best, you score a great deal and you’re even better equipped on negotiation the next time round.
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