Buying a House: 5 Top Negotiating Tips for Success

We’re currently in the process of purchasing some investment properties. It reminded me of how important negotiation skills are when buying a house and trying to get the best price, even in a hot market.  Buying a house is a significant financial decision, and negotiating a lower offer can be challenging for some people. Here are a few techniques that we use that may increase your chances of reaching a desirable agreement.

Thorough Market Research

Knowledge is power in negotiations. Start by conducting extensive research on the local real estate market. Understand recent sales data, property values, and market trends in the area. Armed with this information, you can make a compelling case for your lower offer. If you can demonstrate that your offer is in line with market conditions, the seller may be more inclined to consider it.

Timing Is Key

The timing of your offer can impact its acceptance. Keep an eye on the market and be patient. In some cases, a property that has been on the market for a while may motivate the seller to entertain lower offers. Also, if you submit your offer during a slow season or when the seller is motivated to sell quickly, you may have a better chance of success.

Leverage Property Inspection Findings

After conducting a thorough property inspection, leverage any findings to your advantage. We will often get a building and pest inspection done before we submit an offer. This ways we know exactly what we are getting into before there is too much emotional input or time wasted if it’s not the right property for us. If you choose to wait and use a building and pest inspection as a special condition, then if the inspection reveals issues that require repairs or upgrades, use this as a basis for negotiating a lower price. You can request that the seller either make the necessary repairs or reduce the selling price to accommodate the cost of repairs. This often works well after the vendor has accepted your first offer, as they’re already on the hook and invested in the purchase/sale. Therefore they will be more willing to knock a few thousand off the price to get the sale moving forward.

Before buying a house get financially prepared

Sellers often favour buyers who are financially prepared and can close the deal quickly. Obtain a pre-approval letter from your lender to demonstrate your seriousness and financial capability. If you can show that you are ready to move forward without delays, it may make your lower offer more appealing. If you need to speak to a broker or lender, I can put you in touch with some amazing people in the industry.

Build a Strong Relationship with the Seller

Sometimes, establishing a personal connection with the seller can work in your favour when buying a house. Engage in friendly conversations, enquire about their motivations for selling, and express your genuine interest in the property. A seller who feels comfortable and trusts you may be more willing to consider a lower offer to see their home go to a deserving buyer. It’s never a good idea to walk into the house and start listing everything you don’t like about it in front of the existing owners. Remember this has been their home and they’ve probably got an emotional attachment to it, even if they are selling. If the sellers have to choose between two offers, chances are they will be more inclined to go a buyer who plans to look after their house as it is.

Be Mindful of special conditions

While conditions in your offer protect your interests as a buyer, too many conditions can make your offer less attractive to sellers. Limit the number of conditions in your offer, and consider waiving some that are not crucial. This can make your offer more appealing and increase your chances of negotiation success. It’s pretty standard when buying a house to have your offer subject to finance and  building and pest inspection but anything else may stack up against you if there are multiple offers. This is also why we often get the building and pest inspection done before an offer. If we go in with fewer conditions attached to our offer, then it comes across stronger.

Demonstrate Your Flexibility

Show your willingness to work with the seller’s timeline and preferences when you’re making an offer for buying a house. If the seller needs extra time to move out or wants to rent back the property for a period after the sale, accommodating their needs can make your offer more enticing. Flexibility can sometimes be as valuable as a higher offer. When we are buying an investment property we will always present out offer with “settlement date to suit seller and can be flexible throughout the duration”. Often sellers will feel overwhelmed about moving out in time. When we submit offers we will also discuss with the agent that we are open to the sellers using a shed or garage space to use as storage for a certain period afterwards if required.

Write a Persuasive Letter

Consider crafting a heartfelt letter to the seller explaining why you love their home and why it would be the perfect fit for you and your family. Share your vision for the property and your commitment to caring for it. While not every seller will be swayed by such a letter, it can create a personal connection and make your offer for buying a house stand out.

Engage in Silent Negotiation

Sometimes, silence can be a powerful negotiating tool. After submitting your initial offer, resist the urge to immediately respond to counteroffers or objections from the seller. Waiting for a response can create a sense of anticipation and encourage the seller to reconsider your offer on their own terms.

Be prepared to walk away if your offer isn’t accepted

Remember at the end of the day, you have to be happy to walk away if your offer isn’t accepted. It’s all very well going in to negotiations to get a low offer accepted, but you have to know what figure you would be comfortable to lose the house at. Buying a house in a  hot market could mean sellers may be presented with 10 or more offers and you won’t get a chance to counter should they turn you down. This is when the agent will say “Present your best and final offer”. You get one chance. That’s when communication withe th agent and owners and market research really helps.

Remember that negotiation when buying a house is a two-way street, and maintaining a respectful and co-operative approach is crucial. Be prepared to compromise and find common ground with the seller. While your goal is to secure a lower offer, it’s important to maintain a positive rapport throughout the negotiation process.

In any negotiation, it’s essential to strike a balance between assertiveness and respect. Be prepared for the possibility that your lower offer may not be accepted, and be willing to explore other options or move on to other properties if necessary. Ultimately, when buying a house, the goal is to secure a deal that works for both you and the seller. Maintaining a cooperative and respectful attitude throughout the process is crucial.