There are a number of tactics a person could use to negotiate their property price down. However, remember that it is rarely that a property price would be negotiated below that of what the market is prepared to pay. The main point of this article is to equip during negotiating process.
Study and understand the property market
We think this is the first step. It is also a very important step. Why understanding the property market is important? Because this would enable us to know what is the approximate price of the comparable properties. It also helps understand the reasonable asking price for the property in question.
How to study the property market?
There are a number of ways to study the property market. One of the easiest ways is to look at how much sellers are asking for similar properties on sites like realestate and domain. Look at the sold section of the real estate sites to see the actual price that has been paid for similar properties.
Days on market (DOM) is another good indicator. If generally DOM is high it means that the market could be shifting towards buyers. This could mean that the buyers have more negotiating power. You can find basic view of DOM here.
Understand the property
Understand the property itself. Ask questions like: What maintenance would it require? What is broken and needs fixing? Request a Building and Pest inspection. Armoured with this knowledge negotiation can start to reduce the price. Negotiations could be along the lines of reducing the price of the property to compensate the buyer for work they will need to do.
Use the seller to your benefit
Is the vendor in a hurry to sell? Do they need to settle on a property very quickly? Have they been waiting for a buyer for a while? Once we understand the vendor and their needs we can tailor and adjust our offer. The adjusted offer would be more favourable to vendor needs. Sellers are often prepared to shave tens of thousands of dollars of their price if the offer meets their needs.
Keep your cards close to your chest
We wouldn’t generally tell the buyer the budget or our needs. Why? Because if the seller doesn’t know the top of our budget they often are afraid to lose the buyer by asking too much.
We also prefer to negotiate in writing. Verbal offers and agreements are hard to prove and are difficult to enforce.