When buying a property most people are not very experienced with buying strategy. You could call it bargaining. We understand that the negotiation phase of property acquisition can be a difficult task for people. While we recommend using a buyer advocate with experience in strategic buying, here are some tips you can use to get an edge while negotiating.
And that’s understandable because in our culture when we go shopping, we don’t normally try to discount the price or get an adjustment.
Shop owners set prices and we dutifully accept them. If shoppers always tried to negotiate a lower price, it would annoy the hell out of small retailers in particular, who are trying to make ends meet.
But from a sellers’ ownership point of view, the marketplace is full of price adjustment, going up or down. And retailers are thinking about it all the time.
Whether to set prices higher or lower. It’s common to see a supposedly marked down item in a store on ‘a special sale price’, but you, the shopper, may have spotted the same price on that item many months earlier. So is it a genuine price mark down, or just a strategy to get a sale?
On holidays in Asia you’re often surrounded by haggling. People expect it, market stall owners follow you out of their shop, wanting you to haggle more. It should remind us that it’s a shopping skill we all used to have.
But when buying a property worth hundreds of thousands of dollars it’s naturally a different ball game, so you should be prepared to negotiate.
Here are some tips on how to get an edge, gathered from experienced property buyers:
When buying a property, if possible try to find out as much as you can about the circumstances of the sale and what the vendor really wants. It may be a short term settlement, because the owner has already bought elsewhere. Or the owner may be involved in a divorce, with pressure on to move the process quickly. Or they may be an ex-pat, who has been posted overseas, or going back to their home country.
Finding out more about the seller could reveal something that helps you to make a ‘win win’ proposition to them.
It sounds old school but it can work when buying a property. When haggling over the price, you can introduce a sudden cash offer. To do this you will need to have your finances completely sorted with easy access to funds, before laying the cards on the table.
This means you can pay a deposit on the spot. This is a traditional killer tactic when making a deal.
If it’s in a heated, competitive market, a bargaining strategy is less likely to work. You could risk losing out by making an offer that’s too low ball. It could just waste time and give a rival buyer time to swoop.
If you have done your homework and are sure you know the property’s market value, some experienced Property Buyers recommend that you make your first offer your biggest.
When buying a property, a ‘knockout’ blow can impress a vendor and net a sale, before other competitors have time to catch up.
Don’t tell the seller’s agent too much. In card playing terms don’t show your whole hand and keep your cards close to your chest. Don’t tell them your exact evaluation of the property.
Don’t reveal your budget when buying a property!
In this strategic situation they would like to know as much about you as possible, especially how deep your pockets are.
Don’t let them pigeon-hole you, or keep you on tenterhooks, while they concentrate on getting a higher offer.
When buying a property each property sale has its own circumstances, but if you know some of the best negotiating strategies, the opportunity may arise to use one. It can put you in a stronger position and help get you the result you want.
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