Tips and tricks for property negotiations
Too often we hear stories from clients who have been looking to buy a property and have missed out because they offered too low, too little and someone else came in and swooped up the property. They often tell us that they were doing what they thought was the best thing, come in low and build up and that is was their negotiation strategy. We thought today we’d share some tips and tricks around property negotiations with you, so when you find a property you would like to buy, you have the confidence and skills to secure it.
The first thing that any buyer can do is their research. Of course, the real estate agent selling the property will provide you with all kinds of information about the property and the area, but be smart and look into it yourself. Things to research include; crime rates, infrastructure planning for the suburb, local amenities like schools and shops, the cpital growth rates of the area, rental yields, sale prices for other properties in the area, comparable properties in other suburbs. By arming yourself with knowledge about the property and the market conditions, you can have an educated position in the negotiation and it will be very difficult for anyone to manipulate or mislead you.
Do the maths
Understand the implications of little shifts in the purchase price. For example, based on the mortgage interest rate you’re likely to take out, how much would a price increase of $5,000 affect your monthly repayments? By having a good idea of how price increases or decreases can affect your repayments, you can avoid getting caught up on minor details that won’t make a huge difference, but you will also know what price changes will impact your finances.
Get mortgage pre-approval
We discussed this last week, but by getting mortgage pre-approval you put yourself in a very good position as a negotiating buyer because you can act quickly and speed up the sale process for the sellers. This means that they may be willing to forgo $10,000 on the sale price if things can move quickly. To learn more about mortgage pre-approval and why it is valuable to property purchasers, click here.
Be open to counter-offers
To understand this, you have to think like the seller. Just like you have a price you are willing to pay, they have a price they are going to achieve. Often emotional attachments inflates the property’s perceived value so their expectations may be high. Hopefully, their sales agent has helped to manage this, but be open to counter-offers if it is a property you’d really like to secure. But on the other hand, if it is out of your budget and they won’t budge, be prepared to walk away knowing that there are other home out there that are right for you.
Your property search may take a while, but stay confident and you will find the right one at the right price. When you are talking to home owners or sales agents, be confident, be true to yourself and don’t be afraid to show that you are well researched and in a great position to buy. If they take you seriously, everything will be smooth and easy.
And remember, we offer a property purchase negotiation service for clients so if you are hesitant about negotiating on your own, we’re always here to help!