Have you ever been to a dinner party with a friend who is forever trying to buy their next home?
Perhaps they are one of those property pundits who likes to research the market so much they wind up with analysis paralysis.
Or, maybe, they have been making offers on properties but keep on missing out and are struggling to understand why.
Often, the reason why they are not having much luck is because they can’t negotiate.
They might think that offering a low-ball figure is a “wise strategy” when in reality the property is so in demand that other buyers are offering above the listed sales price to start off with.
Perhaps, they have some form of bias which sees them compare the properties with recent sales that are actually not similar at all, which means they are unsure of the correct market price.
Whatever the reason for their inability to secure their next home, it is a common problem for many potential buyers – and especially in Sydney where there is always strong demand for the best properties in desirable locations.
Low-ball doesn’t fly
Successful property negotiation is as much about skill as it is about experience.
Part of the process is to respect the other party, which is why low-ball offers just don’t work.
If the shoe was on the other foot, and someone offered you a price significantly below replacement value of your home, how would you feel?
While price is certainty part of any real estate negotiation, it is not the only element – plus it serves no purpose to get the vendor seriously offside from the outset by offending them with a low-ball offer.
One of the reasons why some buyers think this is a strategy is because of a lack of experience but also an abundance of emotion.
Buying a home or any property should be as devoid of emotion as possible, which can be difficult when you’re already dreaming of your family living there.
That’s one of the benefits of working with experts like buyers agents who are objective and can make sure you’ve got every chance of securing a property – but not if you have to mortgage your soul to make it happen.
Appraising a property for clients is something we do regularly to ensure that they don’t end up overpaying for it, which can be a real risk for homebuyers who become emotionally attached to a particular property.
Likewise, we are negotiating on properties for our clients every day of every week, including learning what other things are important to the vendor, such as a short or long settlement or even renting back the property for a while.
By understanding all of the relevant factors of the sale, we can then create and implement the best negotiation strategy possible.
In hot property markets like Sydney, it’s relatively common for some buyers to take up to 18 months to secure a property.
Sometimes, this is because of their inexperience in negotiation and other times, it’s because they never got as far as actually making an offer.
The purchasing delay often means that the price they wind up paying is tens of thousands of dollars more than it really should have been.
However, property buyers who sought out professional assistance to make their property dreams a reality have long since unpacked their belongings and are sitting back enjoying their new homes.