Negotiating the purchase price - What to do...
There’s much more to negotiating a purchase price than meets the eye. It’s a fine art, requiring careful research and a clear strategy.
Understand the process
Knowing as much as possible about a potential property transaction and how it will run benefits buyers
That extends from learning about the property itself, why it’s for sale, what’s happening around it and current market conditions, down to who buyers will actually deal with.
When going into an auction especially, it pays to be organised. Buyers without their ducks in a row are immediately on the back foot in any negotiation.
Make sure you have all your finances in order. At an auction especially, you need to be absolutely clear on how much you’ve got, what your limit is and what your strategy is. It’s really important.
Preparation should extend to the terms a buyer wants too.
You need to have the terms you want locked down prior to auction day and have discussed them with the vendor’s agent
Research, research, research
Swotting up before entering a negotiation is absolutely vital. Research as much as you can yourself or use a professional to help you understand the property and the market
Knowledge is power when it comes to negotiation. You need to understand the underlying fundamentals affecting a property and even things like a property’s orientation on the block, if there’s an application in for a block of flats next door or if there’s car parking issues in the street.
There are a lot of external factors and attributes which impact on a property and influence where you go with an offer. Buyers shouldn’t be complacent and rely on what the selling agent says.
If you don’t do your homework, you can pay the price
Know your range
Go into an auction or sit-down negotiation with a realistic range in mind. That range is not the range the agent gives you, but the figure you’re prepared to go to and are comfortable with.
Going in low is not always best.
It’s a case-by-case scenario and comes down to you having done your research.
Keep your emotions in check
Buyers can get emotional about the property, but not about the price.
If you’ve done your research, you know what you can stretch to and you know what your strategy is. Don’t let emotions drive the process.
Confidence and strong body language matter.
If you’re going to have a good chance of getting a property, especially at auction, you have to bid confidently.
There’s no point playing games. Stay within in your limit, but be confident in how you present yourself. What you project, and your body language, both have an impact.