With last Saturday's auction clearance rates down to 48% for the first time in over 2 years, many more properties are being sold outside auction conditions. If you use these tips to negotiate the best possible price, you could end up saving thousands of dollars:
Know what you really want. There is no point in successfully negotiating the lowest price if you don't really like the property in the first place. Similarly, you should have an idea about how much you are prepared to spend for the property before you start to negotiate.
Do your homework. As buyer's agents, we spend a lot of time finding out the following information before we begin to negotiate:
- How much did the property last sell for and when?
- What are the most recent comparable sales and how do they relate to the subject property?
- What are the positive and negative factors which may impact upon the value of the property?
- What are the current market conditions?
- What are the circumstances of the vendor and why do they want to sell?
Listen to the other side. Most of the time this will involve listening to the real estate agent. Since the real estate agent is being paid by the seller to negotiate the highest possible price for the property, it is important not to get pushed around by them. However, if you ask the right questions, the real estate agent may provide some clues as to the circumstances and motivation of the vendor.
Don't be too interested. If you show that you are too keen, the real estate agent will pick up on this and try to talk you into paying too much for the property. Consider these tips:
- Never make an offer during an open inspection or when you are with the agent at the property. Firstly, there could be other buyers who may overhear your conversation. Secondly, this indicates that you are very keen on the property.
- If you are interested in the property at the open inspection, just ask for a copy of the Contract and tell the agent to keep you "in the loop". This is all that you need to do to demonstrate that you are interested in the property without giving the game away.
- Even when the negotiations are underway, indicate to the agent that you are still considering other properties and that the property in question may not meet all your criteria.
Do not become emotionally involved. The negotiation process is often extremely tense and volatile. Bullying the other side or losing your cool are counter-productive. You must remain calm at all times. If you do anything which could anger or upset the other side, they are likely to walk away from the negotiations. Remember that most deals only work if both parties feel that they are getting the right result.
Be patient. Sometimes it may take days or even weeks to finalise the negotiation process. If you are not prepared to wait for the other side to get back to you when the ball is in their court, then you could jeopardise your bargaining position. To some degree you can try to remain in control of the negotiation process by providing reasonable deadlines, but you must still be prepared to wait for the deadlines to expire.
Be willing to walk away. This may be very hard to do if you have found the perfect property which meets all your needs. However, some of the best deals that we have put together for our clients have been when we were prepared to walk away from the negotiations. Even if you are not prepared to walk away, try and indicate to the other side that you are.
For assistance with the negotiation of your next home or investment property in Sydney, speak to an experienced property buyer's agent. Call us on 02 9568 6330