Blog How to negotiate when buying a house?

How to negotiate when buying a house?

02 February 2018
How to negotiate when buying a house?

Here are ten useful tips you can use for negotiating to buy a house:

1. Determine your budget

Before you start house shopping, you should work out how much you can afford. Our home mortgage calculator will give you a rough estimate of what your repayments will be according to the home mortgage rate, term, and loan amount. 

2. Stick with your budget

Now that you’ve determined your budget, you should stick to it as much as possible. Having a budget will help ensure you don’t go overboard when negotiating on a house. 

3. Set realistic goals

Remember to set realistic goals with your buying criteria and budget. For instance, if you’re looking for a three-bedroom house near Sydney’s CBD that’s below the price range of $500,000, this may not be a reasonable price for that location. Be realistic with your goals and budget so you won’t be disappointed.

4. Do your research

They say that knowledge is power. This is very true when you are negotiating. If you have done your research, you can confidently negotiate a fair price and ignore unrealistic demands from vendors. You can do your research by checking out the sales prices of neighbouring houses with similar features.

5. Know the property

You should also take into account factors like why the house is for sale, how long the property has been on the market, how eager the vendor is to sell, and if there are any issues like pests or building defects. You can use what you know about the property when negotiating.

6. Get a pre-approval

A pre-approval for your mortgage is another tool you can use when negotiating. Your vendor/seller will consider you a more serious buyer. Plus this makes you more confident in negotiating since you know how much you can offer for the house based on your borrowing capacity.

7. Keep your cool

During negotiations, emotion may rise so try to remain calm and collected during the process. This can be difficult if you have found your dream home, but make sure that you negotiate with your head not your heart.

8. Time your offers

When negotiating, you want to be chased by the vendor and not the other way around. You can time your offers by determining how eager the vendor is to sell. If you’re continuously chasing the vendor, this may mean that you have a lot of competition. If you really like the property you can give your offer immediately. 

9. Explain your low offers

When negotiating for a lower price, tell your seller why your offer is low. Your reason may be that you found out that the house need repairs or renovation and you need to spend money on it.

10. Be ready to walk away

There’s a possibility that your requests may not be met, so be prepared to walk away if your offer isn't accepted.

Negotiating is a back-and-forth communication and it’s about reaching an agreement between you and your seller. Make sure that you follow these tips to ensure you’re getting a good deal on your home.