If you’re thinking of buying a home in Australia, whether a holiday home or primary residence, here are five top negotiating tips to help you get a little more house for your Aussie dollar.
1. Know your budget
Entering a negotiation knowing your exact budget will ensure you don’t pay more than you can afford for a property or pay over the market value. Plus it helps to separate you emotionally, preventing you from making rash decisions that could leave you out of pocket. Carefully calculate the total amount of money you have available to purchase a property. This might include cash, savings, items you can sell, pension draw down and investments you can cash in.
Entering a negotiation knowing your exact budget will ensure you don’t pay more than you can afford.
2. Know what’s important to you
Price is not the only variable when negotiating a property deal. Sometimes dates and inclusions can be just as crucial when forming a contract. Know what is important to you and be prepared to take a hit on price if your dates are less favourable and vice versa; if you are flexible with dates you will be in a stronger position in terms of power for price.
3. Understand your position relative to the market
It is extremely important to have an understanding of the property market that you are negotiating in, as it will dictate what position you are in financially. There are two markets to consider: a seller’s market and a buyer’s market. A buyer’s market is characterised by a significant number of listings that remain on the market for an extended period of time, which are typically selling under list price. This market is in your favour and will allow you to negotiate harder on a deal. A seller’s market is characterised by a limited number of listings that are on the market for shorter period, attracting multiple offers above the listed price. In this market you will need to be competitive and offer a deal that looks appealing to the seller.
It’s important to employ the services of a reputable estate agent to represent you in the transaction.
4. Work with an agent to represent your best interests
It’s important to employ the services of a reputable estate agent to represent you in the transaction. This is especially important in Australia where the estate agent works for the seller and not the buyer. Therefore, you should hire an exclusive buyer’s agent to handle the negotiation on your behalf. A buyer’s agent will understand your legal rights. They will be well versed in the market and will ensure your best interests are being accounted for.
Knowing how to drive a bargain when buying could help you get more house for your dollar. Read our guide, How to Negotiate Abroad.
5. Be prepared to walk away
Try not to get emotionally attached to a property you are negotiating after. This could result in you making irrational decisions and paying too much for a property. By having your budget in mind and knowing there will always be another property, you can maintain a neutral stance when entering into negotiations, which will result in a more favourable deal for you (however it unfolds).