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In the world of real estate, the art of negotiation is a key skill that can help you score a lower rate as well as better terms on your property purchase. Fortunately, even if smooth talking is not your strong point, like most other skills, you can learn to negotiate a good deal by following these expert tips and staying up-to-date with the dynamics of the real estate market. So, read on to negotiate like a pro the next time you decide to bid at a property auction or enter discussions with a seller:

 
How to negotiate better at a property auction
 

Research the market – When it comes to negotiating a great deal on your home, knowledge is power! Before you step into the market to negotiate the selling price of a property, try to gather information about comparable sales in the neighbourhood to get a fair estimate about the value of the property you intend to buy.

It could also be worth finding out how long the property has been on the market and the reason why it is up for sale. At times, if the seller is in a hurry to conclude a sale, you could strike a bargain with just a little persuasion.
 

Put your best bid forward – When you attend an auction, it is best to have an upper limit in mind, beyond which you won’t spend a dime, as much as you may like the property. However, contrary to popular advice, it is not always a great idea to call out your lowest bid first. If you have done your research, like the house and know it’s worth, it can work to your advantage by putting your best bet first – as it would weed out the bargain hunters.
An aggressive yet well-thought out bet could turn the tables in your favour quickly.
Especially if you are confident about the property you are bidding upon, you could choose to waive the cooling-off period, a tactic that has proven useful in many cases. However, if you do decide to put this strategy into use, make sure you have inspected the property in advance to avoid buying a substandard property that could cost you dearly in the future.
It is also possible to negotiate the contract terms such as the deposit amount, the period of settlement and other inclusions before the auction. If the seller agrees to the changes, the contract can be amended before signing at the auction after you have placed the winning bet.
 
Have your finances pre-approved – Once your home loan is pre-approved, you can move around in the market confidently, knowing you have the money to back your bid. This is particularly important when you are bidding at an auction, as you are committing to purchase the property if you place the winning bid. In case you opt to waive the cooling-off period, it is vital to have your finances pre-approved as you no longer have the space to wriggle out of the deal after exchanging contracts at the auction day, unless there is a default on the part of the seller in terms of meeting mandatory disclosure requirements.

A mortgage broker can help you assess your borrowing capacity and apply for pre-approval on your behalf while you continue your hunt for your perfect home.
 
Be realistic when it comes to pricing – Very often, sellers have a fixed amount in their mind below which they wouldn’t like to sell their property. While prudent sellers would usually think of a sale price based on a professional valuation, often, a seller might be blinded to the real worth of his or her property due to the emotional attachment they have with it. The same situation can arise in the case of a buyer who likes a property so much that he or she is ready to shell anything for it – going beyond the maximum amount they can afford to spend comfortably to purchase a home.

Whether you are a seller or a buyer, it is important to think with your mind than your heart, as waiting too long to sell your property could cost you in terms of interest payments and paying too much for a property could lead to mortgage stress in the future.

As a seller, have the foresight to accept an equitable price for your property instead of chasing a baseless amount in your mind. As a buyer, have the courage to walk away from a property that is beyond your budget; there would be many other perfect homes on the market that would fit your budget as well.

“As a home buyer, you should be prepared to miss out if a property exceeds your budget. While you don’t want to come out as a loser from a negotiation, if a property crosses your walk-away price, it is better to just let it go and start looking for something else than over-committing – a decision you might live to regret,” explains Rob, a mortgage broker who has been in the industry for over a decade. Rob further explains that buyers must be clear about how much they can afford to spend before entering a negotiation. Thus, it is best to plan your finances in advance by getting your home loan pre-approved. You can start by comparing competitive home loan deals or speak with a mortgage broker to understand your options better.

 

By Vidhu Bajaj,
HashChing Content Writer

 

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