Walking through the 3 bedroom house in Lyneham, Maree’s heart began to thump a little harder. After months of scrolling through the Allhomes website for hours on end and spending her Saturdays trekking from property to property, she had finally found The One.
The floorplan was perfect, the central atrium let light flood through, and the yard was ideal for her two blue heelers.
The agent stood in the entrance hall, looking crisp and formidable in her navy blue suit and striped shirt. She was clicking her pen absently as she looked over the handful of names she’d collected as people entered the open home.
Breathing deeply and squaring her shoulders Maree strode forward. The agent smiled. I can work with this. She asked the usual question, “What will they take?” The agent answered. “Will they go any lower?” The agent shook her head. “That’s the absolute lowest?” The agent nodded.
That night over a large glass of wine and take away Chinese, Maree mulled over the situation. She loved the property, but the price was just that little bit out of her budget. She’d spent the evening doing her research—the property was empty and had been on the market for two months.
After a sleepless night, she sat on the couch, phone in one hand, agent’s card in the other. It was time.
Buying a property can be a stressful, never more so than during price negotiation. A common misconception about negotiation is that it is adversarial by nature, that there’s a winner and a loser and that playing hardball is the best tactic.
In truth, taking a win-win approach to buying or selling a home is not only possible, but leads to a less stressful, more positive experience for everyone involved.
Price is not the only negotiation point
There are a number of compromises that both parties can make—many of which have significant value. By putting a monetary value on these, you can keep them in mind when negotiating the final sale prices.
- Settlement period: While the most common settlement periods are 42 and 60 days, the length of time for settlement is not fixed and can be negotiated. Settlements can be as short as two weeks, and can run longer depending on the desires of both parties.
- Subject to prior sale: When the buyer requires the cash from the sale of their current house to purchase the new house. If a vendor has multiple offers they are unlikely to accept this condition unless your offer is exceptional. Even then they will take the advice of a professional to ensure your home will sell for the expected amount in a reasonable time frame.
- Paying cash vs. subject to finance: If you are able to pay cash upfront, you may be able to use that to your benefit in negotiation.
- Repairs: These cost money. Consider their value when negotiating the house price. If you can’t get the seller to budge on sale price, see if they’ll include any repairs that need doing.
- Fixtures and appliances: If you’re a vendor and you don’t want to lower your sale price in a negotiation consider including some of the fixtures and appliances in the sale. If you’re a buyer and you really want that above-ground pool, bargain for it. Sales of luxury homes often include the artwork within.
- Tenancy: Sometimes a vendor needs to sell for financial reasons, but doesn’t want to move. The agent isn’t going to tell you that, but if part of your offer is to keep the vendors on as tenants if needed you may strike gold. Particularly if you’re after an investment property.
- Who pays what: There are a numerous fees and taxes involved with purchasing a home, everything from stamp duty to pest inspection costs. Whether the vendor or buyer pays these is something worth discussing.
- Other special conditions to consider: deposit size & installments, subject to council approval for pools, extensions etc., subject to finance at a specified rate etc.
Work out what the other party really wants
In order to strike the best deal for you both, it’s imperative to find out as much as possible about what sort of negotiations will appeal to the vendors. The agent isn’t about to spill personal details about their client, but their job is to get the best deal for the vendor, and that may be more than just cash.
Maree picked up the phone the next morning and dialed. Common sense said that an empty house was losing money. “I can exchange in less than two weeks and settle in a month, but I can only offer $5000 less than the asking price; that’s my absolute maximum.”
It was a looooong day waiting for response, but in the end her offer of a quick turnaround was enough to get the job done. Four weeks later she was picking up the keys.
Your best chance of reaching a win/win situation is to work closely with the agent representing the property. They know the needs of their clients and are savvy enough to be able to negotiate settlements that get the best deal for the vendor, but also leave the buyer feeling great.
So next time you’re looking to buy or sell a home, don’t treat it like a battle and you may find the process a whole lot more enjoyable.