Honing your negotiation skills - Capitalise on market conditions and negotiate yourself a bargain

There are now sections of the property market in Australia that are flat.

Opportunities emerge for a savvy buyer with the finances organised and proactive strategy in place.

Where there are fewer buyers in the market for the number of properties available for sale, and properties taking longer to sell, that is a ‘buyer’s market’. In those circumstances there is greater scope for driving vendors down on price.

Buyers that have sound negotiation skills can score themselves a better deal. Here are some key tactics for becoming a smooth property operator.

• Know the market – Attend as many inspections and auctions as you can to find out what’s on the market, in the area you want to buy, and at what price properties are selling. Talk to agents and compare quoted prices with final prices. You might think a property is worth $500,000, but in that market it may be worth less. By knowing what properties are selling in your market for you’ll avoid over-paying.
• Don’t be afraid to start low – Where there is a buyer’s market, properties will usually sell for less than their quoted price. There is no golden rule, but start seeking a discount upwards to 10 per cent (or more) than the price the vendor has listed. You’ll be surprised what you might be able to drive the price down to.
• Consider a professional valuation – This may help you determine whether you’re paying fair market value.
• Don’t set your limit at an obvious, rounded number, because most people will do the same – Put your final price in at a more unusual number such as $358,500 rather than $360,000.
• Get in quick – The early bird catches the worm… so move fast.
• Know thy vendor – Find out as much as you can about the seller, including why they are selling, why they’ve set the price they have, how long the property has been listed for and how much interest/how many offers they’ve had. The more you know the more power you’ll have in terms of negotiation.
• Keep your cards close to your chest – Play it cool and don’t reveal too much to the agent. If you’re really keen you don’t want them to know it.

How low should you go?
When making your initial offer the trick is to make it low but not so low that your offer is dismissed. You want to offer enough to get the seller interested. If you are making a low offer, afford a decent reason – perhaps there’s no garage or the house needs a paint job, for example.

To get a lower price, you may also need to offer the seller some kind of incentive. One of the best ways to become an attractive buyer is to offer a quick sale, or if required, an extended settlement time. Remember: find out what’s important to the vendor, use it as leverage.