A win-win approach to getting that property.
Buying and selling a property can be nerve-wracking business, particularly when it comes down to the final price negotiation. When the property market is hot, competition is rife, and tensions are high, a good proactive negotiation plan can prevent you from panic buying or losing out on the property of your dreams.
So, how do you close that property deal with calm, clarity, and confidence? Here’s our five top proactive property negotiation strategies.
1. BE PREPARED
Making a property purchase is a pretty big deal. So it’s just common sense to have all your ducks in a row before you even think about making an offer.
Knowing exactly what you can bring to a property negotiation and what you want out of it will help you stay calm and focussed throughout the process.
So make sure you:
Have your finances in order. Get crystal clear about how much you can afford (pre-approval from your bank or mortgage broker is guaranteed peace of mind)
know your ideal settlement time frame (do you need an extended settlement while your existing property exchanges or are you ready to move in asap?)
Are sure of your non-negotiables. It’s good to know the things you won’t budge on.
2. DO YOUR RESEARCH
Knowledge is power. And when it comes to buying a property that power comes from understanding the market conditions and the true value of the property you’re looking to purchase.
Put on your detective hat to look at comparable sales, property taxes, local employment, crime and growth rates, ongoing costs, and legal obligations. The more you know, the more prepared you’ll be to negotiate like a pro.
Our competitive market analysis reports give you the lowdown on any property in Australia and the local area, as well as current and long-term market trends.
And if you really want to get to know your neighbourhood before you buy, chat to your mortgage broker, real estate agent, and even potential neighbours to get a good sense of the area.
3. BUILD YOUR TEAM
Successful property negotiation is a team effort. Your best chance of a win-win outcome is by working with a trusted mortgage broker, real estate agent, and property conveyancing lawyer from the very beginning.
Having a team of professionals who know precisely what you need at each stage of buying a property will help you negotiate the best deal with savvy and confidence. Teamwork makes the dream work!
They can sort you out with things like:
Understanding the risks and quirks of a property you are looking at
Talking you through each stage and process
Corresponding with banks and lenders on your behalf
Finding and assessing properties that meet your criteria
Gathering the right documents
Conducting a title search
Providing purchase contract advice so you know what you are buying
Ensuring your contracts and funds are exchanged safely and on time.
4. TEST THE WATERS
If you’ve found a house, apartment, villa, townhouse, land, or block of units you’re interested in purchasing, it’s always wise to dip your toe in before making an offer.
How do you do that? Make a non-legally binding offer, aka a Clayton offer, to help you get a clearer sense of what the vendor might accept. You’ll need to be upfront that you’re not making an offer but suggesting a ballpark figure of what you think the property is worth. That way, you won’t get caught negotiating before you're ready.
A Clayton’s offer might sound like, “We’ve been looking around at other similar properties, and I think this one would be comparable, say around $900,000.”
5. BE A GOOD HUMAN
Negotiations take time, and successful ones leave both parties feeling satisfied with the outcome.
Find ways to strike the best deal for both of you. You don’t have to play hardball to get a good deal.
Make the effort to establish a relationship with the other party. Find out what the vendor wants and expects from the property sale. The agent should be able to answer questions like:
Why are they selling?
Have they already purchased elsewhere?
Do they need a quick or delayed settlement?
What’s their definitive price guide?
Do they want to sell to a certain type of purchaser?
And listen carefully for the gold in their answers. The deal maker might not be the highest price.
Once you’ve got enough information and are ready to start negotiation, pick your negotiation point and put in a nice, clean offer. The fewer conditions you include, the better, so choose whether you’re going to add value to the negotiation with:
Paying cash (rather than finance)
Repairs, fixtures, and appliances
Special conditions such as deposit size and instalments or Council approval on extensions.
While you might have a lot riding on a property negotiation, it’s essential to keep your cool. You need to be able to walk away from a sale if it falls beyond your financial limits or encroaches on your non-negotiables. Staying reasonably detached from the outcome gives you more control in the moment. As JFK once said, “never negotiate out of fear, and never fear to negotiate.”
FOUND THE PROPERTY OF YOUR DREAMS AND NEED TO EXCHANGE FAST?
Law Team Property Lawyers are on-call to clarify your questions.