Buying a house is usually the biggest purchase each of us will ever make. But most of us don’t spend any time thinking about the act of negotiating the price. Here are some tips that may help you when you are looking to make an offer on a new home.
- Research
- Do as much research as you possibly can. Use the Neighbourhood Reports and Suburb Trends to get a clear idea of what is reasonable to expect a vendor to accept.
- Why is the vendor selling? Finding out why the vendor needs to sell exposes helpful information that you can use when negotiating. Do they need to sell in a hurry? Have they had the property on the market for a long time? All of these things can show how willing to negotiate the owner is.
- Be ready to walk away
- Make sure you set a limit and that you stick to it. Have all your finances in place so that the agent and vendor know that you are ready. But if the negotiations go to high be ready to say “no thanks, the price is too high” and walk away. You will be surprised how many times walking away from the table will bring the vendors price down.
- Always start at the bottom
- Start below the asking price and move up from there. It is very common for vendors to accept a price that is lower than that advertised, especially if it has been on the market for a while. If you start at the bottom you can always move up, but if you start at the top it’s impossible to move back down.
- You may have to make concessions
- You want the vendor to feel like they won, even if they lowered their price. A way to do this is to make concessions around the settlement details. The vendor may want to settle quickly or slowly be ready to accept these terms, it’s more important to lose some battles in order to win the war.
