Negotiating the price of a property might sound like a terrifying idea. But believe us, it's standard practice in the property industry and a clever way to help keep your costs down. Most property vendors will expect some level of price fluctuation, so don't feel embarrassed or nervous. The very worst-case scenario is that they reject your offer -- and we reckon the possibility of shaving thousands off the sale price is reason enough to get over that fear!
But for first-time buyers, we know it can be overwhelming. Knowing what to do when, and how to play your hand to give yourself the very best chance of a discount, can be tricky. If you're hesitant, read on to find out the best tactics you can employ to assist you during price negotiations.
Ask the experts
Yep, like most things in life, you can learn a great deal from seeking advice and listening to the experts. Finance professionals and buyer's agents can offer advice and talk you through the process, while seasoned investors will be able to share their tips and tricks, as well as their own experiences.
Know your facts
Knowledge is power, so make sure you know everything you need to about the property, the neighbourhood and the property market before you embark on your negotiations. This will help you to convince the vendor why the property is only worth the amount you're offering. For example, were there any parts of the building you'll need to repair, or have there been any recent, similar sales in the area you can use as benchmarks?
Be financially ready
Make your offer as tempting as possible by getting loan pre-approval from your bank. This will show the vendor that you're serious and should also help to speed up the process.
Give and take
The typical negotiation process involves the buyer making the first offer, the vendor making a counter-offer, and so forth, until you can reach an agreement that you're both satisfied with. Set reasonable deadlines for your offers so that the other party doesn't leave you hanging and they realise that you're serious and may look elsewhere if they don't comply.
Hold your cards close
Remember that a clever property purchase involves little emotion. You must be prepared to walk away from the purchase if the vendor doesn't agree on a reasonable price -- or at least give them the impression that you're determined to do so! Good luck!