Would you enter into negotiations worth hundreds of thousands of dollars without any training? Yes you would, if you’re planning to buy a house.
Every day New Zealanders negotiate for houses, pitching their bargaining skills against those of a seasoned professional – the real estate agent.
REDnews spoke to two real estate experts who between them have helped negotiate thousands of property deals. Here are their six top tips to help you get the house you want without being pushed into overpaying.
#1: Be a cash buyer
Being a cash buyer means that your finance is already organised – you don’t need to sell a house or get loan approval before you buy. When a seller gets two offers for similar prices, one ‘cash’ and one ‘subject to finance’ or ‘subject to sale of own home’, the cash offer is the hands-down winner.
#2: Keep it clean
Have just one condition on your sale and purchase agreement, says property finder Maree Tassell of iFind Property. Sale and purchase agreements have a section where you indicate whether a LIM or building report is required. Tassell recommends you choose ‘no’ and just put in a single five-day due diligence condition, then carry out any checks you choose.
#3: Remember that the agent isn’t on your side
Agents are often charming and work hard to broker a deal, but ultimately they have the vendor’s interests to protect. Get independent advice from a friend or professional who isn’t going to make any money on the outcome of the sale, advises Tassell.
#4: Be flexible on settlement date
If you can settle on the date that works for the seller, they will view your offer with a friendly eye, says buyers’ agent Alan Henderson of Erskine+Owen. Sellers will often accept a slightly lower-priced offer if it comes with the perfect settlement terms, whether they need time to house-hunt or a quickturnaround.
#5: Do some detective work
You can try asking the agent what price the seller will accept, but they usually won’t (and shouldn’t) answer. Tassell ferrets out clues by asking: What’s the feedback on the selling range? Have there been any other offers? Why weren’t they accepted? Are you aware of any problems that have put off other buyers? Agents aren’t allowed to withhold or give inaccurate information to buyers.
#6: Don’t start too low
Finally, know what the house is worth, says Alan Henderson. Registered valuations can quickly be out-of-date in a rising market, so you may need to pay even more if you really want the house. A too-low offer will annoy sellers in a hot market and make them more reluctant to enter into further negotiations. In a buyers’ market, you have more leeway, but remember that a sought-after property will always be strongly contested; insulting low offers aren’t popular anywhere.