This advice is aimed mainly at property buyers but it can also be helpful for sellers to be aware these negotiating techniques. Buying or selling a home is likely to be the largest financial transaction you will undertake so it’s worthwhile giving some thought to how to get the best price. Even if it only makes a slight difference in the price, given the cost of the average home that can be quite a sum of money.
1. KEEP INFORMED
Get as much information about the seller’s position as you can from the agent. Are they looking for a quick sale? Has the house been on the market long? Have sales fallen through? This can give you some insight into whether your seller is prepared to drop the price or whether the market is suggesting the property is overpriced. The agent is best placed to know what price the seller would accept. He shouldn’t be revealing this information but his best interests are in seeing the sale go through. Turn this to your advantage. Suggest for example that it wouldn’t be worth you seeing a particular property unless the seller might consider something less that the asking price and see if he arranges a viewing.
2. DON’T GIVE ANYTHING AWAY
This tip follows on from the previous one. The more the seller knows about your situation the better he can guess what price you would be willing to pay. Never let the agent know how much you have to spend or how large your mortgage is. Be as vague as possible. If you fall in love with a house let them know you’re interested but be cautious about revealing the strength of your feelings.
3. TRY YOUR LUCK
Why not try putting in a crazy offer at first. Don’t go so low that the seller feels insulted or you give the impression that you are not a serious buyer. You have nothing to lose and it probably won’t be accepted but it may start the ball rolling on a negotiation. It can also put doubt in the seller’s mind that the property is overvalued. Always give a credible reason for the low price e.g. the kitchen needs modernizing or because of the noise from the train line.
4. CREATE A TIME PRESSURE
If a seller is interested in your offer but wants to hold out for maybe a better offer take this option away by creating a time limit. Don’t just state ‘you have 5 days to decide.’ Create a credible reason otherwise the vendor will feel manipulated. Reasons may be that you have seen another property you don’t want to miss out on or your mortgage offer has a time constraint.
5. DONT BE PRESSURED YOURSELF
Don’t let yourself be pressured into a quick decision. If you have followed tip 1 you will have a good idea of how likely the property is to be sold in the next 48 hours. If yours was the only viewing since the winter then there probably is no reason to panic. Taking time to respond to a counter-offer can create uncertainty and make the seller feel they just want to get the deal done.
6. MAKE YOURSELF ATTRACTIVE
If you’re going to get a lower price out of a seller then it would be helpful to make your offer more attractive in ways other than price. They may feel better about the price if they feel they are getting some compensating factor. Offer a quick sale by making sure your mortgage is in place and consider moving into temporary accommodation to avoid delays in selling your house. Re-assure the seller as much as possible of your reliability and commitment to the sale.
7. KNOW YOUR BOTTOM LINE
Before going into any negotiation you must know what the maximum price is you are prepared to pay and stick to it. Think this one out cooly beforehand. Don’t get caught up in the moment, going over your price. Don’t give any idea away about what your maximum is unless and until it is reached. In this case you make it plain this is your top limit and you can’t go any higher.
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