You’ve found your ideal home, and now you’re wondering how to express your interest without sounding as if money’s no object.
There’s an art to negotiation in the property business. For inexperienced buyers, it’s easy to forget there are likely other parties at the table. You can offer low, stay low and bluff but, like poker, you can overplay your hand and lose the pot.
There’s always a risk when you play hardball, too. While a few succeed, many more have missed out on the home of their dreams for what amounted to a small percentage of the asking price, or because they were determined to win the negotiation.
The key is not to “beat” the seller but win the property. Instead, you should think strategically about how you’ll convince the owner to accept the offer you believe represents fair value.
Of course, you’ll likely have an agent guide you with the process. But it’s good to know how to get the best deals done in real estate.
Here are some steps you can take:
1.) Research is the critical first step: Do your homework on the relevant neighborhood and the style of property you’re interested in. Ignore media stories about the general property market as real estate is about micro markets. You’ll quickly discover if your desired neighborhood is selling fast and rising in value or a little quieter. As an experienced local real estate agent, you are welcome to call me for a reality check on the market. This will help you negotiate from a position of market knowledge.
2.) Psychology of negotiation: We will engage with the agent of a property so they understand you are genuine. We’ll find out the motivation for the sale and discover whether it’s a distressed sale, if the vendor wants a quick sale or if they’re in no rush. The answers to these questions can influence your strategy.
3.) Get building and pest inspections: These will either give you peace of mind, or highlight issues that might rule out the property, or present an opportunity to bargain.
4.) Be respectful: Lowball offers can insult both the selling agent and the homeowner and make them reluctant to deal with us. If you take this approach, don’t be surprised if you don’t get an invitation to counter if another offer comes in.
5.) Stick to your budget: If there’s more than one other party expressing an interest in the property, then the price will likely climb. Whatever you do, don’t go beyond what you can afford. There are serious implications down the track if you do, as you may not be able to get finance to follow through on the purchase.
6.) Don’t get emotional: Even if your spouse wants the property, take emotion out of the deal. Stay calm and use your research on the market to serve as your guide. Always be prepared to walk away.
7.)Special conditions: Negotiation is not just about price. Sometimes, the seller will put a value on being able to close a quick deal, or even stretch it out so they have time to find their next home. We will work with the selling agent to find out what else might motivate the seller.