Tips on negotiating the best price when purchasing your next home
We all love a bargain and, when it comes to buying a home, it is no different.
Don’t be afraid to start house buying negotiations with an offer lower than you are prepared to pay, as the vendor won't counter offer unless it is to their liking. This is if the home is listed by a price or price by negotiation (PBN).
Please note, if the home is listed by tender, or ‘best offer’ situation — you really do need to put your very best offer forward!
Here are a few guidelines when negotiating one-on-one with the vendor from the team at propertytoolbox:
Don’t be influenced by the advertised price, or what the real estate agent is indicating, or even the RV — plan to pay what you feel the house is worth, using your experience of what you have seen to guide you (we have some suggestions on how to work out a house’s market value) and offer accordingly.
Don’t go too low — offer something that you would be pleased to get it at, but you feel is still fair, or at least in the ballpark. Sometimes negotiations can stall right from the beginning when an offer is just too low.
Once you get that first counter-sign, you will have your first indication of what the vendor will accept. You may be partying on the inside as you are actually happy to pay this, but you may also want to put forward another counter offer to see if the vendors are at their final price or if they are willing to meet somewhere in the middle.
It is not always money that changes on a counter-signed agreement or that is up for negotiation — sometimes settlement date is a big issue and being flexible with this is as good as cash to some vendors. Find out if this is the case and use it in your negotiations.
Take time to think about it. If the sale and purchase agreement comes back counter-signed you don’t have to respond straight away — give it a few hours, or even sleep on it.
If the negotiations stall and you are still more then 10% away from the vendor’s price, then it is unlikely to happen. But if you're in the 5% realm, it's likely the deal will make it across the finish line.
If negotiations do fail and weeks later the house is still on the market, think about re-submitting the same last offer — the vendor may now be prepared to meet the market.
For more advice on making an offer — check out the Property toolbox house buying guide.