When it comes to negotiating everybody has their own style.
Some people are natural-born hagglers, others prefer to play a straight bat.
Some people are aggressive and others play the slow game.
While there are no hard and fast rules to negotiating a property price, there are some common property negotiating mistakes that you need to avoid.
Here are our Top Five Property Negotiating Mistakes.
Number 1: Not Being Prepared
Before you even begin, don’t enter a property negotiation unless you are fully prepared to buy.
That means having your finance agreed and in place and being in a position to buy.
That way you don’t waste your or the vendors time – plus being ready to buy puts you in a much stronger negotiating position and prevents any other bidders stealing the initiative.
Number 2: Not Doing Your Research
This is linked to mistake number one. Ensuring your do your market research is part of the essential preparation for any property negotiation.
If you massively undervalue or overvalue the property you will appear naive, gullible and unprofessional – thus weakening your position.
Number 3: Being An Emotional Buyer
No matter how much you love a property you have to cancel your emotions when negotiating.
It’s game of poker. If the vendor can see your emotions are taking over they will exploit this by raising the price or telling you others are interested.
Also if your emotions take over you run the risk of chasing the property at a price that doesn’t work for your business plan.
Instead stay dispassionate. Point out defects to the vendor. Play it cool… and be willing to walk away.
Number 4: Making Silly & Uninformed Offers
While you want to get the lowest price possible, making a derisory offer will actually weaken your position, not strengthen it.
Yes, sometimes it works… but more often than not it can damage your relationship with the vendor or their agent.
Instead it is best to get a feel for the vendor’s position before making a sensibly low offer.
By finding out how long has the property been on the market, has it been at auction and why is the vendor selling (find out their personal or business reasons) you can judge how desperately they want to sell.
By using this information you can make a low offer – but a sensible and considered one.
Number 5: Revealing Your Walk Away Price
Never reveal you final price otherwise the vendor will try to squeeze as near to that as possible.
The agent will try and find out your budget but you don’t have to reveal it.
Just say you are looking to buy at market value or below market value.
If they really want a price give them one that is lower than your true price!