Buying a property is likely one of the most expensive and stressful things you’ll ever do, and it isn’t getting any easier. Australia’s property prices are amongst the most expensive in the world, and this is what makes our property such a good investment and the reason why our property market is so competitive. But once you have completed all your due diligence, and have found the right property, how do you actually go ahead and strike a good deal? Regardless, if you are a first home buyer in Sydney or a seasoned investor, you will not want to over capitalise on your property purchase by paying too much. Falling into the trap of paying too much for a property is easy to do when we are seeing property prices rising and you start to get a bit of FOMO in the property market (the Fear Of Missing Out on a property altogether in a rising property market).
In 2022, we have seen Sydney’s house prices still 20% higher than their pre-pandemic levels. In fact, the median value of Australian properties hit $738,975 back in April, a number that isn’t expected to drop anytime soon. We are currently experiencing rising costs of living alongside interest rate hikes as well as minimum wage increases.
This is what a Buyer’s Agent can help you with. It is important to understand the value of the property you are purchasing and to set a limit rather than getting caught up in the excitement of buying property.
Negotiating a property purchase price can be very intimidating for a novice buyer, but it doesn’t have to be. If you have done your research, due diligence and price comparisons then you just need to stick to your guns.
Negotiation on a property must be treated strategically- like a game of cards where you want to hold your best cards ‘close to your chest’ and play them only if you need to.
Here are our top tips on how to negotiate like a pro:
Compromise
Have in your mind a clear understanding on what you are willing to negotiate on, and what is important to you. Negotiation isn’t always about the final dollar! Understanding the vendors motivations to sell the property is your key for negotiation. If you are an investor, the settlement terms (days for settlement) might not matter to you whether it is 60 days or 120 days but if the seller is an owner occupier and they need more time to find another property then you might be able to negotiate a sweeter deal on the purchase price in exchange for giving the seller a longer settlement period. There is more information on how to compromise on a deal in my book, ‘Buy Now‘.
Research, due diligence and price comparisons
It is important to understand what the market is doing, and what comparable properties of a similar type, size, and in a similar location are selling for. By keeping up to date on any current news can also help you to understand what is happening in the current property markets. Having your research and due diligence on hand will prevent you from falling for real estate sales tactics to try to drive the price up.
Real Estate Agents are NOT your friend
It’s typical that real estate agents to have the ‘gift of the gab’ and chatter to you friendly at an open home or inspection- but this is only one of their tactics to get you to a) think they are trustworthy and b) get you to show them all of your ‘negotiating cards’. Being friendly with a Sales Agent can be risky, so just be aware during conversation that you are not sharing too much information because they will be able to leverage on this information to pull at your ‘heart strings’, or make you anxious to drive up the price.
Seek the help of a professional
If you feel uncomfortable, awkward, or are too worried about paying too much for a property, there is professional help available. Employing a Buyer’s Agent from Aus Property Professionals can help you to ensure you are not overcapitalising and help to avoid falling for real estate sales tactics. It is common that we can save you more than our fee on the property purchase price, as well as save you a lot of stress. A Buyer’s agent will also save you time as they intimately know the market and perform all the research, due diligence and price comparisons on a property prior to negotiating. If you still don’t feel ready to negotiate on your own or you need more guidance, feel free to partner with skilled pros like Aus Property Professionals for appraisals and negotiations.
You can get in touch with our team online via the contact form or call us directly at 1800 146 837.
Looking forward to chatting soon!
If you are looking for a buyer’s agent to assist you with purchasing a home or investment property in the Sydney, Brisbane and Newcastle regions, as well as SA, TAS, ACT, VIC, NSW & QLD please get in touch with Lloyd Edge and his team at Aus Property Professionals here or give us a call on 1800 146 837!
