Tips for spotting a home seller who is willing to negotiate, and how to successfully strike a deal with them.
Most people wouldn’t expect the old “everything is negotiable” phrase to apply to property, yet there are a few instances in which this does indeed ring true. One such example is in a buyer’s market, where the supply exceeds the demand and the buyer generally has the upper hand from the start. When buying property, it may seem that a seller is in the driver’s seat, but with a little research and a savvy estate agent to help, buyers can tap into the subtle hints which reveal that a seller is open to negotiation.
The following advice will help home buyers spot a seller willing to bargain, and help them achieve a successful negotiation on a home:
Don’t reveal too much
Giving away information to a seller about your budget is never a good idea. A seller could then attempt to get their house price as close to that as possible, to get the most out of you. Keep your budget quiet until you have final approval, so you don’t get caught up in a negotiation that is much higher than you intended. Give a market-related price range estimate or something lower than your maximum, if need be.
Put on a pokerface
If you’ve fallen in love with a property, try not to let the seller see this. Showing any sign of desperation could land you in trouble, as you will leave yourself vulnerable to sellers or their estate agents who could play on your emotions to get you to pay their price. Try to overlook the emotion, and check for things that could knock down the asking price, such as any defects.
Do your research
Research the area that you are buying in, and get to know the property market in the area. Different areas have different property prices and getting an overview of the area you are looking in will empower you, as you will know whether a seller has overpriced their home or not. The saying “knowledge is power” is particularly true in this instance, as knowledge puts you, the buyer, in a more powerful position to negotiate a lower price on a home. It also means that you won’t blindly believe that a seller is asking for a fair price.
Get your ducks in a row
If you are legally and financially approved to purchase a home, before you begin your search, you will be in a better negotiating position. Make sure to get your finance pre-approved, a deposit or bank guarantee, and ensure that you have the legal capacity to buy a home. In other words, get your ducks in a row, before you think about purchasing a home. Often, the quicker the sale can go through, the more likely a seller will be to consider dropping their price.
Take note of the lingo
Certain words and phrases in a property listing can be a hint towards whether a seller is willing to bargain. Phrases like “priced to sell” or “needs TLC” show that a seller is wanting to sell their property quickly, or that there are defects in the home and that the seller is more likely to negotiate on the price due to these. Pay attention to the language used in the property listing to find clues on what the seller’s state of mind may be, before you even view the home.
Ask the right questions
It’s a good idea to inquire about a seller’s motivation and objectives. Their estate agent may disclose some information on how quickly they need to sell, or what is motivating them to put their home on the market, for example: a growing family, or a divorce. These two bits of information come in handy when determining whether a seller is open to negotiation.
Length of time on the market
Find out how long the property has been on the market, and whether there has been a sale that fell through. A seller that has had a deal fall through is likely to want a quick sale. If the property has been on market, gone off and come back on, this will indicate a sale that fell through. These kinds of properties are much more likely to have a seller who is willing to negotiate, as they’re ready to move on and may be tired of waiting.
If a property is not occupied, or in a messy state, chances are that the owner is wanting to get rid of it as soon as possible. This kind of property tells you a lot about the seller’s position - for example if the seller no longer lives there, it’s likely that they will be open to negotiation as they have already moved, and the property could be a financial burden on them. Pay attention to the state of the home and follow through with negotiations according to what you see.
Don’t sweat the small stuff
During your negotiations, do the maths before getting hung up on small price differences. Work out how much the difference in price will add to your bond repayments per month and then consider whether it’s worth being stubborn about it or not. Perhaps the total amount is more than you wanted to pay, however if it works out to an affordable monthly amount – in this case it may be worth compromising.
Check your ego at the door
There is no place for ego when negotiating a home price. Being stubborn about things or not negotiating at all, could mean that you end up paying more than you should for a home. It’s tricky to put aside emotions and focus on the deal at hand, but in the end it will serve you and your finances well.
There are no guarantees when negotiating, particularly when negotiating over such a large purchase. However, spotting a seller who is willing to negotiate, and knowing how to bargain successfully could go a long way to getting you your dream home, at a price that you are happy to pay.