Buying a house: How to negotiate the right way
If the word “bargain” sends shivers down your spine, it could be costing you more than you realise. The simple phrase “what’s your best price?” can lead to significant discounts when it comes to everyday buys, so when it comes to buying a house, good negotiating skills could save you tens of thousands of dollars.
No-one wants to be a sucker. And no-one wants to waste time. So when it comes to negotiating, the key is to stay calm, be respectful, and keep your wits about you.
Buying a house is the biggest purchase you’re ever likely to make. Here are our top negotiation tips to get the house you want for less.
Do your research, then do it again
It’s impossible to know what a fair price is until you’ve done your market research. You can bet the vendor will have done theirs. Find out how much other homes are selling for in your area and compare features. Understand why the vendor is selling, how long the property has been on the market and get a building report done so that you can factor any repair costs into your offer. Once you’ve decided how much you’re willing to pay, start by making an offer on a property that is slightly lower to leave room for negotiation. Of course, if it’s a hot property with plenty of interested buyers, make your best offer and cross your fingers.
If you’ve got pre-approval from your lender for a home loan, your offer will be much more attractive to the vendor than an offer from an interested buyer who doesn’t have pre-approval. Vendors want to deal with serious buyers who are ready to act. They don’t want to wait around on paperwork that could’ve been done before the offer was made, or risk losing a pre-approved buyer if the other loan doesn’t get approved. If it comes down to you and someone else with pre-approval, even if your offer is slightly higher the vendor may just do the deal with them instead.
You love this property. It’s your dream home. You want to scream from the rooftop “this is the one!” But save your emotions for the car ride home or when you’re out of earshot from the agent or vendor. If they know how much you love the property, they’ll be less likely to come down in price and assume you’ll be willing to pay more. Of course there is no point in underplaying things either, as you could risk appearing like you’re not that interested and therefore not worth negotiating with at all. Show your interest, but keep your cool.
Be prepared to let it go
Forget about who you are buying the property from and how they’re playing the game. Once it’s yours, you’ll never have to see them again. Be a respectful negotiator, and if the vendor simply won’t come down to a price you believe is fair, is stringing things along, or is getting nasty, be willing to let the property go and look for another one. There is every chance they may come back to you with a deal, but don’t rely on it.