How to negotiate a better price on your home

Staying within your budget is key when you are purchasing a home. But what if you could use the gift of gab to reduce a few hundred dollars off the property price magically?

Don’t worry – Not everybody is naturally good at negotiation. But, just like most other things in life, you can learn the art of negotiation easily.

 

 

To get you started, here are five tips to negotiate smartly when buying a home:

1.Start with research

Any property purchase must be backed with solid research.

Before you approach the vendor, it is advisable to check out the prevailing rates in the area to get a feel of the market. You can find this information on various websites but remember, to ascertain the real value of a property, you’d need to get on the street and personally visit a few properties.

Comparing properties online can give you an overview of the price but physically visiting the area will apprise you of other aspects – such as the quality of construction, street appeal, etc., that can add or take away from the value of a property.

2. Get a little snoopy

Is it possible for you to find out why the property is on sale?

Knowing the reason behind a sale could help you negotiate better. For example, if the seller has put up the property for sale due to some personal reasons or financial emergency, they might be willing to negotiate a lower price if you agree to close the deal asap.

3. Offer a realistic price

Be reasonable when offering a lower price for a property. Unless you have a solid reason, such as a defect you have found in the property during an inspection, do not quote an unrealistically low price that would disappoint the seller.

If you have done your research well, you’d know the real worth of the property. We suggest you offer a little less than that price to leave some room for the buyer to negotiate and agree at a price that resonates with the fair value of the property.

In case you are not making much headway with the price, there are other things you could negotiate to seal a favourable deal. For example, you could offer a shorter settlement period in lieu of a smaller upfront deposit.

4. Don’t reveal your secrets!

Developing a good relationship with the property agent could give you some key insights into the property you could use to negotiate better. Here are a few questions to ask the agent:

• How long has the property been on the market?
• Why is the vendor selling?
• Have there been any other offers?
• What is the asking price based on (if the price is more than the market price)?

However, remember that the real estate agent you are dealing with is working on behalf of the vendor. Therefore, it is best to refrain from telling them how much you love the property or what’s the maximum amount you can afford to shell out as it could go against you in the negotiation process.

5. Keep your emotions out of the equation

When you visit a property, as much as you may like it, don’t let that out to the agent or the vendor because they could use that knowledge against you during the negotiation process. Besides, it is important to be practical about a property purchase than fall in love with a property and feel compelled to go beyond your budget.

The same principle applies at auctions, too. Auctions present an emotionally-charged atmosphere to buyers, and it is easy to get carried away and bid beyond your limit to regret it later.

Remember, if you can’t get the price you can comfortably afford, it is best to walk out and look for other options rather than over-committing to a home.

According to experts, it is essential to determine your borrowing capacity before you start house hunting to avoid mortgage stress in the future. Speaking to a mortgage broker could not only help you assess your borrowing capacity but also determine the size of the loan you can repay comfortably depending upon your financial status and goals.

Your mortgage broker can also help you get pre-approved for a home loan, which would elevate your status as a serious buyer in the market and add significantly to your negotiation power. You can speak to a HashChing mortgage broker to understand your options better.

 
By Vidhu Bajaj,
HashChing Content Writer