House Buying Negotiating Tactics
There are plenty of house buying negotiating tactics out there - In New Zealand we love a bargain and we love to negotiate. The vendor of any house for sale will not hesitate to counter-sign an offer if it is not to their liking – so don’t be afraid to start house buying negotiations with a lower offer than you are prepared to pay.
There are exceptions to the ‘go in low’ theory and that is when you are involved in a tender, or ‘best offer’ situation – here you need to put your best offer forward.
Negotiating tactics come into their own when you are in a one on one negotiating situation with the vendor. So here are a few guidelines.
Don’t be influenced by the advertised price, or what the real estate agent is indicating, or even the RV - plan to pay what you feel the house is worth - using your experience of what you have seen to guide you (we have some suggestions on how to work out a houses market value) and offer accordingly.
Now, there is low and there is LOW. Don’t go too low - offer something that you would be pleased to get it at, but you feel is still fair, or at least in the ballpark. Sometimes negotiations can stall right from the beginning when an offer is just too low, and there is a feeling that no agreement will ever be reached.
If timing is something you want to use to your advantage - have a think about using a sunset clause.
Once you get that first counter-sign, you will have your first indication of what the vendor will accept. You may be partying on the inside as you are actually happy to pay this, but let’s just see if we can get them a bit lower. The meet in the middle technique in this situation is usually a good one - and often expected.
It is not always money that changes on a counter-signed agreement or that is up for negotiation - sometimes settlement date is a big issue and being flexible with this is as good as cash to some vendors. Find out if this is the case and use it in your negotiations.
Take time to think about it if the sale and purchase agreement comes back counter-signed you don’t have to respond straight away – give it a few hours or even sleep on it.
If the negotiations stall and you are still more then 10% away from the vendor’s price, then it is unlikely to happen. But once you in the 5% realm, then it would take some very stubborn people to let the negotiations fail.
If negotiations do fail and weeks later the house is still staying stubbornly on the market – if you are still interested – re submit you same last offer – the vendor may now be prepared to meet the market.
Need more help on making an offer – check out the Propertytoolbox house buying guide.