Negotiate On Property Like a Buyer’s Agent

7 Minute Read

Doesn’t negotiating on property price simply involve a combination of low-ball offers, being firm and even acting partially dis-interested in the hope of gaining a low price?

This may be correct if you’re purchasing in a buyer’s market, where properties are not selling, but when you look at a complete property cycle this type of market condition may only happens every 20 years and usually only lasts for two years.

Therefore it’s important to understand the art of negotiating for the purpose gaining a cheaper price or settlement terms, according to current market conditions.

Industry expert, Wise Real Estate Advice Buyers Agency Director Mark Ribarsky, shares his top tips for closing the deal including a real-life example of how his advice worked!

Listen to our podcast on negotiating:

Understand the Market You’re In. 

Are prices going up (Sellers market), down (buyers market) or sideways? This determines the balance of negotiating power on either the buyer or seller. Take for instance the 2017 property market in Melbourne, this was clearly a sellers market, properties were selling above market value, some suburbs experienced over 20% growth.

If you where a buyer in this market, submitting low ball offers would get you nowhere. Successful buyers recognized it was a buyer’s market and were prepared to bid above the range to close the deal. Buyers that can determine the market they are shopping in will create an opportunity to sit in the negotiator’s seat when submitting an offer.

Negotiate On Property Like a Buyer’s Agent

Know Your Price Range 

Knowing how much you can spend and shopping within this figure will lower your time on market and make sure you’re creating opportunity to purchase.
This tip will increase your chances of becoming a buyer rather than a browser. Speak to a mortgage broker to work out your buying capacity.

Know The Properties Market Value. 

Buyers tell me, selling agents quote low during the marketing campaign, then come auction day buyers are gob smacked at the high closing price.

I call this the ‘forgetful real estate agent’ The agent quoted a high selling range to the vendors, trying to win the business, yet somehow forgot the price when speaking to buyers just weeks later.

To avoid getting effected by the ‘forgetful selling agent’ syndrome it’s important to know what a comparable property has sold for. For instance, how much has a property with comparable specs (house and land) sold for in the last 3 months within a few kilometers of the listing? Once a buyer understands price they no longer need to rely on an agents guidance on this issue.


Understand The Vendor’s Motivation For Selling. 

This is useful when negotiating terms of settlement or getting a deal across the line. Consider the vendor looking at two offers of the same price, yet one offer has a 6-month settlement term and the other has a regular 60 day settlement.

The long settlement allows the vendor time to finish building his new house, access much needed deposit funds or organize bridging finance. In this case the seller could even accept a lower price if his unique terms are meet.

Every sale is unique and it’s vital to understand why the seller is moving out of the property to tailor an attractive offer.

Timing The Offer.  

A vendor is always more willing to negotiate on price when selling time on the market is longer than normal. You can spot these types of sales by watching the market and not following the buyer crowd. Usually this type of property has had a few failed auctions, has changed selling agents or has had an average marketing campaign.

Respect The Vendors and Offer Your Story.

Selling property is an emotional process that most vendors do not enjoy, it pushes people out of their normal comfort zone. Hence trying to bring a price down incorrectly. This can often bring vendor’s walls up.

To defuse this situation it’s wise to offer a story with your price. If you were in the vendor’s shoes which story would you relate to? A young couple that is getting married, buying there first home who love the seller’s property, they have dreams of making the property a home and can only afford a certain price.an investor that’s buying his third property that’s considering putting tenants in for the life of the property, monetary gain at the vendors expense being the only driver of the offer.

Show Interest In The Property So The Agent Knows.

Most buyers assume showing a disinterest in a property protects them from the Jedi powers of the real estate agent. Agents are a bank of knowledge when it comes to understanding why the property is on the market.

If the seller has a need of an urgent sale it’s important you’re the buyer that’s front of mind when the agent picks up the phone. So tell the agent you have you loan approval and deposit ready, mention your feelings about the property and to call you if any offers are on the table.

More importantly if there is a need for an urgent sale. You will be surprised at the opportunity this can create when the agent tells a vendor about you.

Case Study: The advice in practice, 80 Westgarth St, Northcote.

I was hired to bid on a property that was quoting $2.20M via an auction campaign; my budget prior to auction was $2.152M. I closed the sale at $2.010M after the property passed in saving my clients $190,000, so this is how I did it.

I believed few buyers could afford this property at auction; the agent had chosen the wrong selling method for the price range. I also recognized that the market had slowed down in the area, hence the stage was set for a slow auction and potential negotiation.

The agent opened the auction at $2M on a vendors bid, I was the only bidder and won the auction with my bid at $1.9M, the property was passed in and I had won the rights to negotiate. I also didn’t want to offend the seller with a low-ball offer, potentially closing the opportunity to negotiate altogether.

Once I was invited in the house to begin the arm wrestle, the agent told me the reserve was $2.175M. Taking my time we went back and forth several times over thirty to forty minutes. My buyers were wondering why the auction had failed but I had assured them prior to auction that this would happen and told them to believe in the comparable sales research I completed. During the negotiation, I gave my client’s story twice to the agent, I increased my bid each time respectively till both parties came to an agreement.

Successful Negotiation 80 West Garth Street Northcote

6 Mistakes to Avoid During a Property Purchase Negotiation

When buying property, we all want to get the best price possible. But not everyone is a natural negotiator, and if you make mistakes while buying property, it can be costly. A vendor’s agent will work tirelessly for their vendor and secure the best price possible. Many buyers think the vendor’s agent is helping them, but the agent is focused on doing the right thing for the vendor only.

To ensure you’re getting the best price possible for a property you’re buying, you need to learn how to negotiate. These skills can take many years to acquire, but the more you study, you’ll learn to avoid some simple mistakes that will improve your chances of getting the best price possible.

Most people will only buy a property once or twice in their lifetime, so you may not get the opportunity to negotiate property often. However, if you look out for these six common mistakes by novice negotiators, you’re more likely not to get tripped up by them and negotiate a good deal.

Being emotional about the property

Falling in love with a property can be one of your biggest mistakes. You’ve looked around the house and can see yourself living here for the next twenty years; it’s the perfect place! Unfortunately, this thinking often means you’re willing to pay any price to secure the property.

Whenever you look into buying property, you need to leave your emotions aside. Have a clear picture of what the property is worth and remain steadfast about remaining under your budget. Buying property is an investment and needs to be treated as such. While it is ideal that you find a home that is perfect, many homes for sale can be negotiated down to a better selling price.

Buying a home that you plan on living in is always challenging as you’re looking at something you’ll own for many years. When making an offer, constantly remind yourself that this is precisely what the home is worth and try not to make an offer more than its actual value. Always remember that even if this home is perfect for you, there’ll be another one for sale soon, and you won’t miss out by sticking to your budget.

If you feel you can’t keep your emotions in check, then it may be best to secure the services of a buyer’s agent and have them find a property and negotiate on your behalf.

Not enough research on the current market

When people start looking at properties, they’ll often dive right in and not complete any market research. Reasons for this behaviour could be that people in Australia are used to fixed price items and not used to shopping around to determine the best price for a particular object.

If you’re looking at property in the window of a real estate agent, you’re only getting a glimpse of the market. Are you going to take their word for the value of the items they’re trying to sell? Many real estate agents are trying to get the best prices possible for their clients and may ask for more than a property’s current worth! If you have researched the area and know the selling and sold prices, you are better informed about the location and will find negotiating easier.

Having an educated opinion on the value of a property will allow you to negotiate more confidently. You can easily talk the price down, as you’ll be backed with evidence of recent sales and other properties on the market.

Only looking at one property

If you’re negotiating on a property and the agent knows you haven’t looked at many others, then it’s less likely they’ll budge much on the price. However, after looking at several properties, you may find the agent is more motivated to secure your bid, as there is every chance you’ll walk away from the deal.

When you are first interested in a property, let the agent know about one or two other properties you’re looking at in the area. Ideally, these other properties should be cheaper than the one they are selling. You can talk about these homes and why you think they may be better suited, and what the agent can offer.

Not only will having these other properties help you negotiate, but they can act as a good backup plan if the sale of the house you want doesn’t go ahead. Preparing to walk on a deal could be the agent’s push to determine if the vendors are keen to sell rather than see another buyer fall through the cracks.

Only making a verbal offer

The facts are that only a written offer will be taken seriously. When you make a verbal offer on a property, you do nothing more than show the real estate agent your hand. They’ll know precisely where you’re at and can use this information against you in the negotiation process.

If you’re firm about your offer, write it down, ideally on a contract of sale. This will tell the agent you’re firm on the price, and you may not be willing to move any further on the price.

Submitting a high offer

Working out the value of a property can be a tricky business. The worst thing you can do is wildly overvalue a property and place an offer. The vendor is likely to snap up this offer without hesitating.

The only time you’d likely need to place a high offer is when the property is heading to auction and you’d like to buy it without competing against others. Agents are often loathed to cancel auctions, as they can generate reasonable prices for their vendors, which results in a high commission. However, if they receive a reasonable price, they’ll likely take it to the vendor and accept it if they choose.

Making an offer on a property heading to auction can be tricky, so you must be cautious. Auctions are an excellent place to let emotions run wild, but if you’re prepared, you can buy property at a better price than you’d expect.

Submitting a low offer

Low balling on a property can be almost as bad as offering a high price. Placing an offer that is too low will only result in wasting people’s time, and it may see you out of the running if there are other offers on the table. For example, if a property is priced at $720,000, and you make an offer of $640,000, it’s doubtful the vendor will accept it, and they may choose not to deal with you any further.

Any offer you make should be reasonably justified, and not just a price you’d like to pay. Everyone would like to pay as little as possible, but going too hard on a low offer is only insulting. If the property is overvalued, the vendors will come down after receiving no offers on it.

Not using a buyers’ agent

Using a buyer’s agent means you won’t need to rely on your skills in negotiating. A buyer’s agent will work for you to get the best possible price on a property you’re interested in buying. These agents are trained in negotiating techniques and will use their skills to secure your property.

A buyer’s agent will act accordingly as they’re not emotionally invested in a property. Many are highly educated on the property market in the area you’re looking to buy. A buyer’s agent will take care of all the negotiations, and they know how vendor agents operate and how best to counter their actions. Buyer agents will often have access to off-market properties, which means you can get a property for less as the vendor will not seek to recover funds spent on marketing.

In Closing

Negotiating is a complex process and like everything in life it’s best done with practice. Following this guide can help you sharpen any deal by saving you money or achieve and favorable settlement terms.

If you’re concerned about negotiating Buyers Agents are professional negotiators that offer their services for a fee. They can mange the whole process and usually save you their fees though their negotiating skills.

At Wise Real Estate Advice, we ensure all boxes are ticked and that sincere care is taken when providing a buyer with the wise advice and action required throughout the buying process. To speak to one of our friendly buyer’s agents click here to fill out an enquiry form or just simply call us on 1300 00 WISE. 

info-graph: Negotiating mistakes

Before your ready to submit an offer, read our article on ‘Getting  ready to make an offer.’

Feel free to ask them below. 

    Your Name *

    Your Email *

    Phone Number

    Your Message