Step Four: Negotiation
Before negotiations start, here are our top tips to wrap up the Buying Process. All you have left to do is name your target price and we take care of the rest.
The friendly ‘leading, local agent’ that sent you all the emails and remembered to call you with every new listing is employed by the vendor. She/he is now your jousting partner.
Don’t submit a verbal offer and then attempt to bargain backwards after inspections have been conducted. Instead, try to seek out as much information from the agent as you can without giving anything away.
The first phone call
Make a quick phone call to the agent – not to make an offer, but to request a copy of the contract of sale. Let the agent know that you may be interested in the property but leave it at that. It is critical that you aren’t drawn into conversations about price as good agents will take note and refer back during negotiations.
Once you have forwarded the contract of sale to your conveyancer, arrange for relevant inspections such as pest and building, a strata report and/or property valuation to be carried out.
This will take a few days to organise and the agent will likely use this time to create a sense of urgency. Expect follow-up phone calls and suggestions that other buyers are interested. Don’t be drawn in – there is usually no urgency unless another party has already submitted an offer.
Use this time to review your Buying Process. You should be confident that:
- Finance is pre-approved
- The property meets the requirements of your features list
- You have viewed the property
- You have thoroughly inspected alternative property listings and have studied recent sales
- You have studied recent sales and have a target price in mind
- Relevant reports have been ordered and will be reviewed by your solicitor or conveyancer
- You have set a target price to pay
Depending on your review of the Buying Process and the outcome of any inspection reports, you may want to rethink your target price or whether you want to make an offer at all.
The second phone call
If you decide not to go ahead, call the agent and let them know why. If you do still want to go ahead, ask the agent the following questions before settling on an amount:
- Is the property still for sale?
The agent may tell you they are currently negotiating with another party. If they are, does this alter the initial amount you are prepared to offer?
- Have you had any offers yet?
If so, at what level?
- What are the vendors preferred settlement and deposit terms?
This information may help you negotiate later on.
- What price are the vendors willing to accept? Where do you think we should offer?
Is this close to what you were considering? If not, do you know why?
- Are the vendors ready to accept an offer today if it’s at the right price or do they require more marketing time?
Armed with this information, you can decide how you would like to proceed.
If you are going ahead with an offer, now is the time to engage Hello Haus.
If you are going ahead on your own, do not make your initial offer over the phone. Arrange to meet with the agent and:
- Make your offer in writing, on a contract of sale. Present a signed contract together with a deposit cheque, ready for the agent to present to the vendor.
- Communicate that your offer is time limited and that you are watching another property. Follow through by removing your offer if the vendors haven’t agreed within the timeframe stipulated.
- Expect that your first offer will be knocked back and that negotiations will begin.
Engage Hello Haus to negotiate on your behalf. All you need to do is complete the steps to the Buying Process and, when you’re ready, Hello Haus will secure the property that you want at the best possible price and conditions. We’re experts in saving you money.
Appoint a real estate expert to be on your side, save you money and secure your property at a better price.