Top negotiation tips for buyers.
Negotiating a property purchase is a serious business, so it's important to be armed with as many tactics as possible to give yourself the advantage. If you’re in the market to buy a property this winter, here are our top tips to help you negotiate your property purchase like a professional and seal the deal.
Get your finances in order
Be clear about how much you can afford and get pre-approval from your bank or mortgage broker. If you know your ceiling, you will know your limit. And remember, price isn’t everything when it comes to a sale, often vendors are looking for a quick settlement with a buyer who has their finances in order.
Understand the vendor’s motivation to sell
If you are able to, it can be beneficial to uncover the vendor’s motivation to sell, as there are often factors in play other than price, such as the timing of the sale and their sentiments about the property. Building a positive relationship with the property’s real estate agent can help you understand the seller's motivations and requirements.
Research your offer
Robust comparable sales analysis and local market research will give you the best chance at securing a property for its true market value. Research property sales in the surrounding area, especially homes with similar attributes. Track what sold, when and for how much, and start to attend other open inspections and auctions to keep tabs on current prices and market demand.
This will enable you to prepare a thoroughly researched offer, which should also consider the unique features or defects of the property in question. Giving you not only more credibility at the negotiating table, but also helping to frame vendor expectations about what you’re prepared to pay - which may lead to a softer counteroffer.
Avoid making your first offer too low, as this could insult a seller and lead to them walking away. Instead, try to strike a fine balance between your goal of securing the property at the best price possible, while still offering a realistic market price unlikely to offend the seller.
Be careful what you say
When negotiating, don’t make statements like “This is my highest offer,” or “This is the most that I can pay, take it or leave it,” unless strictly true.
If the seller doesn’t accept your offer, it is very difficult to convincingly go back to the table with a higher offer. This tactic can undermine any goodwill and trust you have built up in your negotiations with the vendor and their agent, making them suspicious of you.
Similarly, don’t inadvertently insult the vendor or their property by describing the property in derogatory terms, especially if it requires work. This is unlikely to help you secure it for a lower price. Instead, talk about how a property has potential but needs work to bring it up to its best condition, which is reflected in your offer.
Be patient and don’t rush
A golden rule of negotiating is to avoid appearing desperate to do a deal. Once you’ve made an offer, be patient while you await the seller’s response.
If they don’t respond in a reasonable timeframe —provided they’ve definitely received your offer—you may have to assume they are not interested in negotiating further. In this case, it is better to look elsewhere instead of making a second offer, which can make you look too keen.
Likewise, don’t try to hurry the negotiations along too quickly, as this also sends a message that you’re over-eager. If the circumstances permit, don’t be afraid to proceed at a steadier pace, which can also help negotiations feel less stressful for the vendor.
Leave your emotions at the door
Negotiating can be a daunting prospect for buyers and sellers alike. No matter how stressful or intimidating the process is, it’s important to remember to leave your feelings at the door and apply pressure only if you are confident your terms are acceptable. Emotions and urgency can cost you a sale.
Be prepared to compromise
Negotiation is all about give and take and price may not be the only thing on the table for discussion. Other areas for negotiation include the length of settlement, deposit, existing tenancy, and fixtures or inclusions - everything and anything can be up for discussion.
Ultimately, if you are clear on which elements are must-haves and those that are simply nice-to-have—and prepared to compromise on some of the nice-to-haves - then you are more likely to walk away with a deal that meets your requirements.
For assistance with starting your buying journey speak to your local Belle Property agent today.