Negotiation when buying property is a tricky thing. Buyers always want to buy the property for a steal, and sellers want the maximum price. We get that.
From my experience in going through many negotiations, there are some things that are good to do, and some things that will only hamper the process.
The good
Establish your price to yourself early
Work out your top price and your ‘I’d pay it if it meant I got the property price but I wouldn’t tell anyone price’. This helps when it comes down to the wire in the final negotiations. If you are confused on value your agent should be able to help you, or you can read my post on value here.
Be fair and reasonable
Don’t be silly and come in with an offer 20% below the value, or make unreasonable terms. When you are fair and reasonable sellers can see that you are serious about buying the property and will take you seriously. Sellers need to see the light at the end of the tunnel.
Giving a little wriggle room
When you do make your offer, particularly your initial offer, leave some wriggle room for movement during negotiations. Unless it is a really good offer, or under multiple offer situation, the first price offered is rarely accepted.
People expect to negotiate and sometimes a vendor (or buyer) just needs to go through the experience of negotiating. So let them have that pleasure, just make it a good one.
Give to get
When you are making a claim for something that you want, then give them something in return. A good example of this is if they need a certain settlement date then you might give them that and offer slightly less, or vice versa.
Know your non-negotiable points
Do you need to be in the property by a certain date? What is your budget capped at? If works need to be completed prior to settlement, what are the ones that you absolutely want done by the outgoing vendor?
Information is power
Know as much as you can about what the other party wants, does the vendor need to be out by a certain date? Or do they need an extended settlement timeframe?
A purchase I was negotiating was won by a purchaser because they offered a four month settlement time frame that could be extended if required. This was important for the vendor as they were building and ultimately helped secure the purchase.
The bad
What’s wrong with my offer?!?
Going in with boxing gloves on
I have never seen aggressive negotiation tactics work in Real Estate. In fact if anything they irritate all the parties involved. I have seen many deals killed early that would have worked all because one party was being overly aggressive.
Low balling
This is often touted by investment groups and books, in all my experience whenever someone has done this it only resulted in one thing – a pissed of vendor who then won’t play ball.
Wanting it all your way
No one likes it when someone just wants it all their way, don’t take it personally and realise you may need to give something somewhere along the way to make it work. Being flexible goes a long way.
Being difficult towards the Agent
Remember it’s the Real Estate Agent that is presenting the offer and pleading your case. You want (need) them on your side. A good Agent will not let emotions get in the way of good advice, however being aggressive, demeaning or otherwise to the Agent is not a good idea.
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