Negotiating? 5 tips for buying a house at the best price.

Some of us are natural hagglers, perfectly comfortable bartering for cheaper apples or free on-road costs on a new car. For others, asking for a discount brings on cold sweats. But making an offer on a house calls for smart tactics and leaving the fear of negotiating behind can mean big rewards.

There is often room to move in property pricing. Listed ranges and even ‘fixed’ sale prices are generally a starting point for talking money. We’ve got five tips to help you master the back-and-forth of negotiating on your first home without making a run for it.

1. Know the market.

It’s impossible to know what a fair price is until you’ve done your homework. Get your running shoes on and head out to comparable properties. Look at list prices but check out other factors, too. Are the inspections busy? Is there a lot of development in the area? How many other properties are for sale in the same suburb? How long have they been on the market? Being clear about the price of and demand for similar properties can help you arrive at a reasonable figure.

It’s not always just about the dollars, either – if you’ve got your finances sorted, can match the vendor’s ideal settlement terms, or even just seem friendlier than the next guy, you might have more room to make a lower offer.

2. Channel your inner Keanu.

We know, the high ceilings are heaven. And yes, it’s walking distance to the microbrewery with cheap wings on Thursdays. But take a deep breath. Centre yourself. Find your Zen. It’s hard to drive a bargain if you’re gushing to the selling agent.

If the agent thinks you’ll do anything to secure a dream property, they’re more likely to play hard-ball when it comes to negotiating on price. Try to give the impression that you’re cooler than you are. Who cares if you miss out on the perfect summer barbecuing spot? Not you. Let your freak flag fly after the deal is inked.

3. Be ready to act.

Having conditional loan approval in place can be a game-changer when it comes to price negotiations. You’ll know how much you can really afford to pay, so you can be confident in your counter-offers, and it adds credibility to your position.

It can be good to let the selling agent know you have conditional loan approval sorted – it confirms your status as a serious buyer who can finalise the deal without delay. Your ME Mobile Bank Manager can organise conditional loan approval before you even begin checking out open for inspections.

4. Knock off around 5%.

There’s no such thing as a typical buying discount. The amount a seller is willing to accept will vary for every property in line with the state of the local market, the nature of the property and the vendor’s individual circumstances. But things like buying a new place before selling this one, needing to move fast, deceased estate sales and unpredictable markets can all make negotiating more palatable.

If you think a property’s asking price is fairly realistic, knock off 5% to 10% from the advertised price. If you believe the asking price is way over the top, or you know the property has been languishing on the market for a long time, start with a lowball offer of 15% less.

5. Be prepared to walk away.

Honestly, this should be your mantra at every stage of the house buying process. Negotiations can be stressful and demoralising, for you and the vendor. The longer it takes, the more likely it is someone else will swoop in with a better offer. Even without another offer, endless haggling could see the seller pull out just to get away from you.

It might not be possible to agree on a price you both think is reasonable. Don’t let negotiations turn into a battle of wills; anyone who’s seen The Princess Bride knows that never turns out well for the little guy.

A quality property will rise in value over time and the long-term capital gains can more than compensate for the difference between a 10% versus 5% price discount.

It’s always worth making a play for a cheaper price. Even a 1% discount can knock thousands off your purchase price. Arm yourself with realistic information from the market, pre-approval on your home loan and a fair offer. An ME Mobile Banker can help you with the finance, and your go-getter attitude has got the rest covered.