Welcome back. We hope you had a relaxing Christmas & New Year holiday break and feeling refreshed and energised to continue your search for that perfect property!
If you’re reading this, then you no doubt have experienced the frustration and disappointment that comes along with attempting to buy in a hot market. I know – I’ve been there too. In order to assist you and make the experience less stressful but more successful, we’ve put together some tips which will allow you to take more control during the process. At the end of 2013 we shared with you our first 2 tips:
Tip #1 – Planning is Key
Tip #2 – Choosing the right property.
This week, our Tip #3 is Smart Negotiating Tactics.
So, you’ve finally found a property that ticks all the boxes. As if this wasn’t hard enough, now comes the most difficult and stressful part of all… securing the property. The key to negotiating is trying to find out the minimum price the vendor is willing to sell at. Sounds easy in theory, but when you’re dealing with a sales professional who negotiates for a living, it’s no wonder this part of the process is extremely disconcerting for most people.
If the property is being sold by Private Treaty, ie with an asking price, there are several tactics that real estate agents use to ensure you pay top dollar – after all, that is what they are paid to do right? So here are 10 tactics of your own to choose from:
1. Remain unemotional – When you are inspecting the property, even if you really love it – don’t show it.
2. Don’t return to the property 5 or 6 times with every relative under the sun. This is a dead giveaway of your intention.
3. ALWAYS let the agent know that you have offers on other properties. This will put you in the driver’s seat.
4. Know your market. The more knowledge of recent sales you have, the more confidence you will have during the negotiation process. It’s important that the agent can see you know local values and will be less inclined to try and pull the wool over your eyes.
5. If you can, try and find out why the owners are selling. Good agents won’t divulge this information, however others can’t wait to share the most intimate of details. It’s worth a try and will tell you much about how ‘motivated’ the seller is, ie if they’ve already bought elsewhere then they will be feeling the pressure and may accept a lower offer.
6. Find out how long the property has been on the market. If it’s been on the market for more than 4 weeks in a seller’s market, then you know that their expectations are probably too high. It may be worthwhile to just sit back and keep an eye on the price.
7. Set a maximum price that you would be prepared to pay for the property and don’t go over it. This takes a huge amount of discipline which is why it is often a good idea to have an independent representative such as a buyer’s agent do the negotiating for you.
8. It’s a good idea to make your first offer not more than 10% under the asking price (presuming that the ask isn’t overinflated). You don’t want to get the vendor offside by making a ridiculously low offer to start with. You risk them not being prepared to counter offer, or worse still they may accept someone elses offer of similar value over yours.
9. Stick to your limit. The last thing you want is to pay too much for a property due to your emotional attachment, and then spend the next 5 years (or more) making up for it. Be brutal and let the agent know that this is your ‘best and final’ offer and be prepared to walk away if they don’t accept it. There will always be another.
10. Put offers in writing. This can be a very powerful tactic. When the negotiations are close to reaching your maximum limit, put your offer on a Contract. If the seller sees your offer this way accompanied by a deposit cheque, they are more likely to seriously consider accepting it and will also put you ahead of the pack.
We hope you have found a few pointers here to try for yourself. We’d love to hear how you go.
Alternatively, if you’re still not comfortable with the negotiation process, give us a call and we will handle it all for you. There is definitely a huge number of advantages to having a buyer’s agent act on your behalf. You will benefit from our many years of experience in the industry, completely independent advice as well as a lack of emotional attachment. And as a very special gift to you for reading to the end of this article, we would like to offer you a 20% discount off our standard Service Fees when buying. This offer is only valid to the first 7 readers, so be quick! Call us today on 0411 522233.