How to negotiate property purchase price?

Last updated on November 25th, 2021 at 09:23 am by Bill Tsouvalas

It is never easy when you have to go between your dream home and its price. You have now found a property that you want to buy, but can you get the perfect price on it as well? Considering that house prices in Australia have grown substantially in the past years, it is estimated that they will increase even more. With the prices going up by 5% in the last year and stock levels going down by 30%, buyers are swarming around opportunities like sharks. Here are 5 tips for you to get your perfect price!

1. Be aware that the negotiation is a process

Most Aussies end up literally ‘homeless’ because they want the perfect price right from the start. What they do not realise is that in order to get something, you need to give something as well. Don’t just barge in there, claiming. Try to put yourself in your seller’s shoes, and help them see your point of view. Just figure some stuff out: why are they selling? How can you state your case better? Playing a good hand might as well get you that price that you wanted. Read 10 questions to ask at the open for inspection.

2. Learn about the market

It’s not all about how much you are willing to pay – it’s about how much others are willing to pay as well. A price is generally set by demand, so you need to know the average price for a similar house. Play your cards well and get your bid.

3. Use an agent

In most cases, it’s better that you communicate with the seller’s agent rather than the seller himself. When you meet with the agent, you need to be professional, polite, respectful and always make a good impression. Communication is key, so you’ll need to express your clear interest while still holding onto your cards.

4. Think your low offers through

Many Aussies make small offers in hopes that the seller might be desperate for the money, naive or simply unaware of the actual value of the property. However, if you truly want to purchase that property, you need to think through your low offers. Keep expectations as close to reality as possible and inform the agent why you are offering that certain price for the house. If you are coming with a low offer, mention them that it might be because of the need for renovation or because something in the house must be changed. Try to pitch the first offer at about 10% of the market value, and go from there. The closer you get to a real selling price, the faster you will make your purchase.

5. Always be aware of your own limits

You can get very emotional about a house that you may want to buy. However, remember that you have a budget and that you don’t want to go over it. Do not get caught up in emotion at sales or auctions, because that’s where the most money is lost. Think carefully about how you’re planning to make your offer. Should you go with the highest offer right off the bat, or should you make a lower offer that can be bumped up later in? Remember that in the fever of a negotiation, you need to stick to the price you already had in mind.

Be aware of what you are buying and, based on that, set an appropriate price that will satisfy both you and the buyer.

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