Price is not the only key to property negotiation
After a long and detailed search trying to find something within your budget, it can be easy forget there’s so many other points apart from price to use as leverage when negotiating your purchase. And don’t trick yourself into thinking you don’t have choices when you’re buying under auction conditions.
You can use plenty of strategies and leverage points during an auction campaign to distinguish your offer, and if you’re buying outside of auction conditions the amount of negotiation points explodes in your favour.
When we’re buying properties for our clients, as outlined below, we approach the negotiation from three different angles – attractiveness of the offer, agent communications, purchase requirements.
Make your offer more attractive
You might be in a really hot market, or basically just really want the property and while price will definitely be pivotal, consider the following aspects to pull your offer to the top of the list.
To be successful at this, it’s important to obtain a solid understanding of the vendor – what will make the offer more attractive to them.
- Longer settlement / shorter settlement – find out what’s important to the vendor and adjust your offer accordingly.
- Making the funds available during the settlement phase / early access to deposit funds – get legal advice on this before you offer, but if a vendor needs access to the deposit funds it can get your deal over the line.
- Unique items – allow the vendor to take items of importance – for example we once had a family that wanted the dishwasher. Consider items such as custom curtains, high-end appliances, storage cupboards or integrated sound systems.
- Waive cooling – effectively submitting an unconditional offer which means you’re buying almost under auction conditions. Be careful using this approach but if you have access to a building and pest inspection report and know that your finance is in place, then it’s worth considering this option.
- Think creatively as your leverage can really be anything – from covering removalist fees through to support in finding their next property (this is one item we use often as we have the ability to help people buy anywhere in Australia).
Most buyers forget the influence the agent has in presenting offers to the vendor. It can often be much more than you (or sometimes they) will realise. This becomes even more important when offers are close, so keep this in mind when you’re negotiating your offer.
- Understand the agent’s style – find out what’s important to them, and ask a few questions about how they present the offers to their vendors.
- If you’re buying and also selling – let the agent know you will be selling and that you will consider using the agent for the sale of your property.
- Ensure you respect the agent’s time – be honest and transparent – of course you don’t have to disclose everything, but if you’re interested in the property, be sure to let them know. If you have some concerns about the property, talk it through with them as they may have some knowledge that could inform your views.
- Ensure you’re organised and respond to the agent’s reasonable requests. Seriously . .no matter what type of market you’re in (fast or slow), make sure you have your finance in place and ideally a good solicitor ready to go. If the agent calls you, as long as they’re not pestering you, be professional and respond to their call.
Make your purchase more successful
Items to negotiate to ensure the purchase works well for you.
- Cooling timeframe + % deposit + settlement – request timeframes and deposit limits that work for you.
- Make sale subject to valuation.
- Ensure your solicitor reviews the contract and adjusts items like % interest for late payments and checks for items such as caveats.
- Incorporating clauses such as “use of campaign photos for tenant advertising prior to settlement”.
- Building and pest inspection – issues found should influence a re-negotiation of the purchase price – offer vendor the opportunity to complete the repairs themselves or receive a discount at settlement.
- Early access for the purposes of measuring up . . ideally don’t commence substantial work until settlement.
- Negotiate to purchase key items such as a custom table, alfresco fittings.
Keeping the above three categories in mind when you’re negotiating your purchase will make your offer stand out, and more successful for you as well as the vendor.
If you want some help to find and negotiate your next property, give us a call or book in for a strategy chat
Author: Debra Beck-Mewing
Debra Beck-Mewing is the Founder and CEO of The Property Frontline. She has more than 20 years' experience in buying property Australia-wide, and is skilled in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is experienced in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, Editor in Chief of Property Portfolio Magazine and participates on numerous committees including the Property Owners' Association.
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Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.