How do I negotiate my house price when buying?
September 15, 2014 / Written by Rich Harvey
When you're trying to buy investment property in Sydney, you can find it hard going, especially if it's your first time entering the market. Deciding when to make an offer on a house is hard enough, but what about negotiating the price?
How do I know I'm not getting ripped off?
The easiest way to address this is to research comparable properties in the area - ones within the same suburb or in adjoining suburbs, with the same amount of bedrooms and bathrooms. Ensure that you compare similar land size and internal measurements. Properties closer to the shops and transport nodes, or in prime streets may command a premium compared to others further away. Properties that passed at auction or are still in cool off could be a good bet to check out - if it's still on the market, it may be possible to negotiate. Compare the prices of these homes to what you are being asked to pay, and you'll have a better idea of whether you're being asked for a fair price. You can get an appraisal to work out the ballpark value of a home, but remember it has no legal standing, whereas a valuation does.
Should I be forward with my offer?
Yes, but not overeager. Get comfortable with the agent representing the seller, and always ask questions about the home and other buyers. Inquire as to why a home is being sold - the answer can help you gauge whether or not the vendor is desperate to be finished with a deal. When you make an offer, don't be afraid to propose a figure well below what you wish to pay. Like the look of the furniture? Ask if it can be part of the deal as well. The more confident you are with the first offer, the better placed you will be for ongoing negotiations. Treat it like a first date - be interested, but keep it cool, calm and confident.
They said my offer was too low: How much higher do I go?
Unless you were directly told 'no', your offer is still on the table. Hearing a seller or agent say 'that might be a bit below their expectations' is not a definitive rejection, and leaves you room to negotiate. Remember, a real estate agent's role is to sell the house at the best price for the vendor. Working with a buyer agent can help, as they have expertise in negotiations and will represent your best interests. If you want assurance that you will get a great price with a trustworthy representative, you should engage an agent today.
Want more tips on home buying? We have a series of in-depth reports on home buying that you can access here.
And if you want the very best tips on property negotiation, check out our infographic Property Negotiation Tips From Experts.