Back in 2019, when major property markets like Melbourne and Sydney declined, negotiation tactics used by investors changed a lot. They needed new ways to determine a fair value for an investment property. Buyers in auctions would typically strive to wrap up a house purchase in the first week after an auction. Now some buyers are taking their time and trying to negotiate post auction.
In previous times, for properties going to auction, you had to move quickly to cut out a lot of the competition that would gradually build up over two to three wells. It usually resulted in buying a bit above market value when it finally came to auction day.
But now that markets have slowed down, investors can take their time. Investors can put in some low offers leading up to auction day, then negotiate on the price if the house fails to be sold at auction. By this time a property seller may be so concerned with the money they spent advertising that they decide to accept a lower offer just to get rid of the property.
There are many ways to negotiate a lower sale price for a property. Read on to learn some of the most popular tactics for securing a lower price that buyer’s agents often use.
Low balling
While a lot of investors may be hesitant in offering a low price for a property, there are a lot of advantages. Don’t be afraid to take the emotion out of the negotiation process. Try your best to maintain a respectful atmosphere throughout the offer and purchase process. At this stage it’s also important to be open to counteroffers when you’re negotiating a low price.
Be respectful
In some cases a seller is only focused on making a sale. They don’t want too much time with negotiating. However you should always be respectful and courteous during the negotiation process. Being aggressive and pushy can instantly put off a vendor and see you out of the race for buying the property.
Be transparent
It’s also important to be transparent during the negotiation process. Being transparent helps to build trust with the vendor. The more trust you have, the more likely the vendor will be open to at least listening to what you have to say about your offer.
Be mindful of time
While you may be able to afford taking your time when it comes to looking for property, when the market slows down there will always be more competition. More hungry bidders looking to bid on the same house you have your eye on. Always keep this in mind when the market slows down and don’t be afraid to put in an offer that you’re confident with straight away. The earlier you bid, the more chance you have of getting ahead of your competitors early on.
Early offers
Agents and owners often like to close a deal as soon as they get an offer in writing. Owners often like to keep their property on the market for at least four weeks to attract a wide range of offers. There can be a lot of stress and emotion that build up over this time. In this scenario, if they get a good unconventional offer early on and it enables them to do what they wanted to do, they will probably take it.
Real estate agents are usually keen to sell properties sooner too. If they can spend the minimum amount of time and resources for selling a property, they’ll gladly take that chance. Selling a property in one week compared to eight weeks can help the agent and vendor save a lot of money on marketing.
