How to negotiate the best deal when buying a house

Buying or selling a property is one of the biggest financial transactions you’ll ever be a part of, regardless of whether you’re a first-time buyer or a property investor. When you’re talking about spending a few hundred thousand dollars or more, getting the best possible deal is crucial.

Buying or selling a property is one of the biggest financial decisions you will ever make, regardless of whether its your first purchase or you are a property investor. When you are thinking of spending a few hundred thousand dollars or more, getting the best price is absolutely crucial.

Negotiating the best deal is key! Once you have found the exact property you are looking for, it has met all your requirements in the perfect location you hoped for and you are ready to make an offer, you don’t want to spend a cent more than you have to. This is where your negotiating brain needs to be switched on.

Its important that you do the following before negotiating:

Research the market- there is no way for you to know what the property is worth without doing prior research, look for similar properties that are for sale or have sold in the area to see how they compare to the property of interest. How is the property market trending in your area? Having better knowledge of what the property is wroth will give you better bargaining power when you need to negotiate.

Research the property- Ask questions to cover everything you need to know. Here are a few we suggest:

• Why is the vendor selling?
• Are they looking for a quick sale?
• How long has the property been on the market?
• How much is the vendor expecting to sell the property for? Is that price flexible or is there room to negotiate?
• Does the property have any known issues, such as building defects or pest problems?

These questions will give you a better indication on the motivation of the vendor. For example, is they are moving away and hoping for a quick sale, they may accept a price lower than the original asking price.

Take emotion out of the equation- To remain cool, calm and collected during the negotiations, try to remove emotion from your decision making. Keep in mind that if you don’t secure this property, there will be many similar properties around the corner that will fit your buying criteria. Opportunities arise every day to purchase property, is the price of the property is out of reach, let it go. Fear of missing out (FOMO) can be a powerful motivator, especially in the excitement of an auction, so don’t let it overpower your plans or budget.

Set a budget & stick to it- Before house hunting its important to sit with a financial advisor/planner to work out your budget. Its also a good idea to speak with your bank or mortgage broker to find out your borrowing capacity.

Its always a smart idea to offer an amount less than your maximum limit, this ensures that if the vendor wishes to negotiate you will still have room to move and it could save you a significant amount of money.

Make sure you stick to your budget, even if you are under pressure because there is competition from other buyers or you fear on missing out on what seems to be the perfect property, don’t sway.

Last but not least, Confidence– Confidence and strong body language are key. If you want a good chance at auction you need to bid confidently. Stay within your limits but back yourself on your decisions to bid to that limit.