10 negotiation tactics to help you secure the best property for the best price
It’s a time-tested strategy to buy low and sell high. But how do you nab a good deal in a hot market? All too often people forget that negotiating is actually about striking a deal. Rejections and counter-offers will occur along the way. That’s the way negotiation works.
01 When researching, compare like with like
In order to establish what a property is truly worth – and what you are willing to pay – it is essential to undertake thorough research into the area’s market. Understand that you have to compare like with like. Don’t compare two-bedroom units with four-bedroom houses.
02 Don’t rely on online research only
Online research is very different to on-the-ground research. Get on the street and visit a few properties. There are many elements (eg aspect, street appeal, elevation, finishes, quality of construction, position) that you can’t find out about online which impact on the true value of a property. Having this information gives you bargaining power.
03 If you are genuinely interested, show it
Tell the agent you like the property, but don’t make promises. Always be open, honest and transparent about the extent of your interest.
04 Be prepared to meet the market if need be
At the end of the day, if a property is an inherently valuable one, don’t be afraid to pay a fair and reasonable price to secure it quickly. Making it clear you are willing to do so is also a good thing to do.
05 Understand the auction process
Beware the emotional, pressure-cooker environment of auctions. It is easy to get caught up in the atmosphere. Attend as many auctions as possible to get comfortable with the process and understand the rules involved.
06 Make use of building and pest inspections
Getting building and pest inspections done before formal negotiations begin gives you additional information. The more you know about a property and its condition, the better a negotiating position you are in. Any issues with the property can be used to leverage a better deal.
07 Include clauses in your favour in a contract
Give a copy of any contract to your conveyancer to review and suggest any changes that you should negotiate into an offer or pre-auction. When negotiating via private treaty, include clauses in your favour (eg subject to finance; ability to access the property before settlement to obtain quotes for building works).
08 There is always more property
Should you miss out on buying a property, remember that there is always more property coming onto the market. So you never have to negotiate from a position of desperation. That leads to mistakes that can cost buyers tens of thousands of dollars.
09 Dawdling can be fatal
When there are no other offers you may gain the leeway to negotiate longer for a better price. But never dawdle, as another buyer could turn up at any time and whisk the property out from under your feet.
10 Don’t succumb to time pressure
If you feel under time pressure, you won’t negotiate as well. It is easy to feel that pressure. But for investors it’s really just a perception. You don’t have to buy right away, yet the vendor usually does have to sell within a certain timeframe.
