This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Negotiating the purchase price of a property you’re looking to buy or sell has been compared to everything from contact sports to hostage situations. With insights from industry experts, Bliss Conveyancing has put together some tips to take the awkwardness out of negotiations and help you achieve a better result.
Prior Preparation Prevents Poor Performance
Alliteration aside (and yes, we know there are a few more P’s in that saying), there’s simply no substitute for preparation. According to Macquarie, preparation is the number one thing you can do to boost your confidence before heading into negotiations.
The most effective preparation involves:
Research – Understand the market you’re operating in and the drivers of value it dictates. You can get a sense of this from your agent, property data platforms such as Domain, or your own review of the local area.
Motivations – Understanding the motivations of the other party can give you valuable insight into which aspects of the negotiation they might be prepared to move on.
Be Ready to Pay – If you reach agreement on a price but can’t secure finance or otherwise don’t have the funds to complete the purchase, your negotiation efforts will be wasted. You’ll also find it difficult to reopen discussions later.
Crafting the Irresistible Offer
The best deal leaves both parties feeling like they’ve given up something but still walked away with an acceptable outcome. Most experts recommend avoiding the “lowball” offer (or an outrageously high one if you’re the seller) — as it often backfires by alienating the other side early on.
If you’re planning to use a FOMO strategy like, “We’re also looking at a property in the next street,” make sure to mention it well before formal negotiations begin. Dropping it at the last minute can come across as insincere and work against you.
Informal offers can also be useful for testing the waters. A quick text or email can provide immediate feedback and help you gauge where the other party stands before entering formal negotiations.
Leave Your Emotions in the Car
Or at least at the door — that’s the advice from Canstar. Letting emotions get the better of you or revealing how badly you want the property can undermine all your preparation and strategy.
Have a clear picture of what you want, and set a firm maximum (or minimum) price before you begin. Knowing your walk-away point helps you stay rational and prevents costly decisions made in the heat of the moment.
If you’d like an introduction to a buyer’s agent, valuer, or other property professional, get in touch with Bliss Conveyancing and we can arrange an introduction.
