In a time of eye-watering high property prices across not just capital cities but the regions too, you may be wondering if you can still negotiate a deal on a home.
When you are making the biggest financial commitment of your life, ensuring you get a good deal should be at the top of your priorities. And with property prices back on the rise, it’s time to start honing your negotiating skills. After all, if you don’t ask you don’t get.
Rich Harvey, CEO and Founder of propertybuyer.com.au said: “Negotiating is an art and for most people, it’s not something we do every day.”
“I’ve seen high-level executives who negotiate big corporate deals with great skill just fall apart when it comes to their own house,” he said.
While a better deal on a home is never guaranteed, let’s explore some of the options you may have to put yourself in a better position when choosing a property.
- Do your homework
To be in a strong negotiating position, you may want to start with the basics: researching and understanding the property market in the area you are looking to buy.
By doing so, you can unlock details around how much you should be paying, which may help you avoid paying more than a property is worth or identify properties with a more competitive price tag.
“Know your market. Do a comparative sales analysis of similar properties in the area, and look at like for like,” Mr Harvey advises.
“It’s not enough to compare a three-bedroom two-bathroom house with another similarly sized property, you must also compare zoning, aspect and view, proximity to amenities and other location benefits,” he said.
- Beware of FOMO
Buyers who fall in love with a property are more likely to spend more than the property is worth because they can’t bear to miss out on it. And buyers who try grab anything they can get their hands on can find that real estate agents will take advantage of that desperation to extract a higher price.
“Don’t catch FOMO disease. Emotional attachment is very hard for people to overcome,” Mr Harvey said.
“They may be looking at an area they really want to buy in but may not be able to afford it. Our advice is to look at surrounding suburbs that may be more affordable,” he said.
Looking towards a bridesmaid suburb – that is, a suburb near your dream suburb that is close to the same amenities – may allow you to get the best of both worlds by purchasing a more affordable property near your dream location.
Whether you are buying a home to live in or an investment property, be realistic about what you can afford and stick to it. Try to leave emotion at the door if possible so you can keep a clear head about what your best property option may be.
- Be prepared
Real estate agent Mark Dawes of Richardson & Wrench South Sydney said being prepared ensures your place in the game. “If you don’t have pre-approval, we don’t take you seriously,” he said.
You may be in a more advantageous position to negotiate if you already have pre-approval, and your deposit is ready to go – particularly if the vendor is seeking a quick sale. At the very least, you may want to consider researching how much you could afford to borrow using RateCity’s Borrowing Calculator before you start pencilling in inspection dates.
- Get a professional opinion
It’s not enough to trust the value of a property as it is presented to you by someone hoping to gain the greatest return on their investment. If you think you’ve found an ideal home, it may be worth considering obtaining a property valuation to give you a deeper understanding of its market value for your negotiations.
This option may be useful for home buyers who are moving to a new area, or those considering interstate migration that aren’t familiar with the property market.