4 tips on how to negotiate the purchase price of your dream home

Published on December 1st, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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There is a hidden art when it comes to sealing the deal on buying a home with a purchase price that leaves you smiling. There is no trickery by using a quick waving of hands, but it’s the powerful tools of research and strategy that can see you shaking hands to seal a deal off. We have gathered four tips to help you negotiate the purchase price that could help bring you one step closer to your dream home.

1. Research to know what you are dealing with

How bad you want that house to be your home will determine the level of research you will put in. Research as much as you can about the property you want to purchase. Be in the know by researching before entering a negotiation. This can give you leverage when it comes to negotiations. Try to find out everything you can in terms of the property market. This could range from things such as; how the property orientation affects the price, features that might cost more or less when compared to similar properties on the market, if there are any car parking issues, and other external factors that could influence the purchasing price. Consider why the property is being put up for sale and current market conditions that are surrounding it. This is one of the few times whereby stalking a building will be seen as normal, so FBI search every possible angle.

2. Keep abreast of your research by being organised

You want to come across as someone who means business by talking business. The last thing you need is having your information mixed up when presenting your case. Strategy is key, and having all your ducks in a row can see you winning. You need to keep abreast when it comes to your finances by keeping them in order.

Be realistic and know what your range in terms of what you can and cannot afford. There is no point on speaking about numbers, when you don’t have the big bucks to back you up. Go with a range of how much you are willing to depart with, but always stick to your guns when negotiating. The aim after all is to woo your way into a home purchase price that benefits you. Don’t be shy to enlist the help of a professional who has been in the property market to help you out.

3. A good strategist never reveals their game plan

Negotiating is a mind game which aims to see who can best manoeuvre another negotiators mind. The catch is to never reveal your game plan. Your dream home could be one step away for you to claim it as your own, but never let emotions get the best of you. Keep a clear mind. You have already established a realistic range of how much you are willing to pay, but revealing this to a seller or seller’s agent is a game give away. They could outsmart you by negotiating a price that is higher. Never reveal your budget when asked.

Try to bring them back to negotiating the property at market value or market-price range.

4. Be confident, but not overly confident

Body language can contribute a lot on the level of how seriously someone takes you. With research and strategy by your side, the next thing to complete your negotiating skills is to have the look of someone who knows what they are about. If you are at an auction this counts even more if you want to stand out. However, be aware when the ball is out of your court in terms of securing your perfect property. Know when to bow out gracefully with your funds still intact.

Negotiating house purchases will differ from case to case, meaning you will have to strategize and research accordingly. Be sure to listen out to what is being spoken, and not spoken by potential seller. Know your limits and when you have nailed the deal make sure you have the appropriate home loan to cover you.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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