Save on Property Price
A few thousand knocked off the purchase price of a property could save you thousands in interest repayments. We did some research to find out the top five strategies that buyer's agents use to negotiate a good deal with vendors.
- Act interested
The agent is unlikely to call you back if they don't feel you are interested in the property. You are better off building a good relationship with the agent from the start rather than pretending to act disinterested.
- Check comparable sales
To give yourself a sense of the market and what is a fair offer, you need to have a good idea of what similar properties have recently sold for (going back by two to three months). Expect to look at anywhere between 50 to 100 properties and purchase sales price data to find comparable homes and discover how long listings have been on the market.
- Don't be pressured
When you're being told that there are lots of people interested in the property or that another couple has put in an offer, it's hard to know whether or not you're being tricked into a higher price. For this reason it's important to feel detached enough from the property that you can walk away from it if the price gets too high. Ideally you want to have identified several other properties that you'd be happy to purchase.
- Dig for information
Try to gain an understanding of the seller's position so that you know how likely they are to negotiate. Ask the agent questions like: why is the vendor selling? Do they need to get a particular price for the property or settle by a certain date?
A seller, who has already purchased another property, is in financial stress, divorced or moving interstate may be more motivated to achieve a quick sale. Finding out the factors that make the transaction attractive to the vendor, including any conditions they want met, might give you the opening to negotiate further on the price of the property.
- Find a middle ground on price
If you start at the asking price, you have nowhere to move and the vendor will think you have more to spend.
If your offer is too low, such as 30 per cent below the asking price, you risk not being taken seriously and putting the seller off-side. Aim for an offer that is close enough to the asking price to tempt the seller and still give you breathing space to negotiate a good deal.