Price Negotiation Tricks Every Home Buyer Should Know – realestate.com.au

Brushing up on your negotiating techniques with the inside knowledge of a real estate agent can have a big impact on how much you pay for a home.

Buying a home can be an overwhelming experience, especially if you have your heart set on a place you’ve recently seen.

With uncertainty about inflation and volatility in the economy to consider, every dollar you save on the purchase price can lower your loan payments.

Brushing up on your negotiating techniques could potentially save you tens of thousands of dollars on a home’s asking price.

Mortgage Choice asked a number of brokers to share some of the best negotiation techniques they’ve seen in the industry over the years. These are described below.

1. Be prepared

Before you even start negotiating, make sure you know exactly what you’re in the market for and what you can afford in repayments.

Being prepared also means getting pre-approval and knowing your financial limits, which can give you the confidence to make an offer and walk away. Speaking to a mortgage broker prior to your house hunt can make all the difference when it comes to fully understanding your situation.

When you make an offer, make sure the offer is the price you are willing to pay, and not necessarily the asking price. If any work is required on the property, make sure you take this into account when making an offer.

2. Be transparent

This is not the time to keep your cards close to your chest. Successful negotiation is not so much about certain techniques, but about knowing local agents and building trusted relationships with them, says Thomas McGlynn, CEO of BresicWhitney.

“Be clear and communicate your position and what you want to achieve, along with honest feedback about properties you’ve seen recently,” he adds.

“Not only does this help the agent you are dealing with, but by extension it also helps the seller understand local feedback and where the market really is.”

3. Support your decisions

While being transparent and communicative is important, Mr. McGlynn says you need to be firm while standing behind your decisions.

“If you are adamant about the price, size or requirements of a house, these are probably very important to you. Don’t feel pressured to compromise,” he says.

“Also, focus on educating yourself: be present and active in your local market, attend open houses and auctions, and research local sales so you’re informed.”

4. Avoid analysis paralysis

It’s crucial that you don’t focus too much on timing the market or you could get stuck in analysis paralysis.

McGlynn reminds buyers of that time in the market will yield much better results than trying to time the market.

“Buying when it suits you financially and in line with your requirements or goals is what’s important. There are opportunities in almost all market conditions, and the majority of well-located, quality properties, especially those around Sydney’s key lifestyle markets, will perform well over time.”

A great real estate agent you trust can help you discover these opportunities and understand the market, he says.

5. Understand the question

Across the country, certain neighborhoods and suburbs are in higher demand than others, which affects your ability to negotiate.

Do your research by looking up recent sales in the area to understand what similar properties have sold for. This gives you a benchmark of what homes have sold for lately, helping you determine how low you can go without offending the seller in the process.

6. Think about the economy

A lot can change in a few short months when it comes to property prices, and therefore your ability to negotiate.

There is a lot of uncertainty at the moment. Although a further cut in cash rates seemed very likely before 2025, this is anything but the case with the release of the September quarter inflation figures lost all chances.

These factors can all influence the market, which may be in favor of buyers or sellers at the moment. Review property sales history online and keep an eye on market insights and economic reports to understand what’s happening with the market in the area you want to buy.

7. Temper your emotions

Remember, the seller is selling the property and the buyer is there to buy, and the agent is there to facilitate the process and manage communication between the two parties, says Andrew McCann, CEO of Jellis Craig.

It is important that a potential buyer builds the right relationship with the seller. Photo: Getty

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Even if the real estate agent has just walked you through the home of your dreams, remind yourself that good negotiators temper their emotions and enthusiasm and walk away calmly to gather their thoughts and figure out their next move.

“Buyers who handle negotiations poorly sometimes come across as too aggressive and sideline the seller,” he warns. “Once the seller emotionally decides that he doesn’t like the buyer for some reason, and decides he doesn’t want to sell to him because the buyer may be playing too hard, negotiations can break down quite quickly.”

8. Make a written offer

Buyers should be transparent about their interest level. This means that they negotiate in good faith and that their offer is put in writing.

“The agent has a duty to bring all offers to the seller, and when the offer is in writing it shows willingness and intent and builds confidence in the process that the buyer is genuine,” Mr McCann explains.

9. Think about the extras

You do have other negotiating tools at your disposal. The terms and conditions of the sale can save you a lot of money, so consider what other elements of the sale could work in your favor.

For example, you want a 30-day settlement so that you do not have to live somewhere else when your lease expires. Or maybe you want to negotiate that the refrigerator, piano and garden furniture stay.

These items may be small in the grand scheme of things, but they can add up pretty quickly if you don’t have to drag your refrigerator to the new house.

With all this in mind, your next purchase could be yours before you know it.

This article first appeared on Mortgage choice and is republished with permission.