Real estate negotiation: Key home tactics for buyers, sellers and renters
Whether you’re a buyer, seller or tenant, you can prep yourself with intelligence gathering and negotiating tactics to have a better chance of success.
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Everyone loves a real estate bargain, be it a house bought below market value, sales success or securing a great rental.
But being on the better end of the stick when there are agents who are seasoned veterans in the equation is easier said than done.
Here is what buyers and sellers need to know about negotiating and real estate tactics.
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PURCHASING PLOYS
Real Estate Buyers Agents Association of Australia president Cate Bakos said before negotiating, buyers needed to gather intelligence.
A good starting point is to ask how many contracts have been issued.
“Most agents will tell you this if there’s competition,” Ms Bakos said.
“If they won’t say anything, it might be a hint there aren’t other parties.”
Also ask the agent which property is the most recent comparable sale.
“That will usually be what they have told their vendor, which will give you an idea of what the vendor is thinking,” she said.
Buyers should also avoid tripping themselves up. High-risk areas include making a low-ball offer, which if it is too extreme could irritate a vendor and lead to them preferring another party.
“And don’t tell the agent it’s your final offer if it’s not,” Ms Bakos said.
“They won’t come back to you if someone else makes an offer.”
She advised making a clear offer based on recent sales — without any indication of your budget.
Being conscious what is divulged to one agent could be shared with other franchises in other suburbs is also important if you will apply a different budget for different homes.
Keeping track of past dealings could help avoid issues arising from this and make buyers more confident — which could give them the upper hand against a “rookie agent”.
Ms Bakos also warned against over-communication – which could make you seem desperate.
“Ask ‘when are you likely to come back to me’ and then don’t ring them or follow up until that time,” she said.
At auction, having the final bid for a home that passes in does provide an advantage for exclusive negotiation.
“But knowledge is power, be equipped with your own comparable sales for the property printed out and folded up in your pocket,” Ms Bakos said. “Put them in front of the agent and quiz them on what their reserve is based on. Just don’t push it so hard you lose that negotiation position.”
This tactic is stronger when there are no underbidders outside. Having a friend or family member stay put to let you know what the street looks like could be a savvy move.
Outside of auctions, Ms Bakos said many buyers made offers subject to finance. But making yours unconditional might trump a higher bid from another party if the vendor opts for certainty, as could meeting their preferred settlement date.
Finally, putting a time on offers could help put pressure on the seller.
SELLING STRATEGIES
Stockdale & Leggo chief executive Charlotte Pascoe said sellers should be aware of the tactics being used to sell their home – and to win their listing.
Promises of a wonderful price or a fast sale could easily be made by an unscrupulous agent with no plan to achieve either.
Ms Pascoe suggested keeping an eye out for good communication; an agent who explains until you understand exactly what they plan to do to sell your home.
“They will emphasise unique selling points of the property, conduct comprehensive research on local real estate market conditions and be more open to compromising on certain terms to facilitate the deal,” she said.
Vendors should also be cautious if an agent intends to misrepresent or conceal important facts – which could cause legal issues later on.
Beyond this, research is key to ensuring vendors are in the best position to negotiate. Ms Pascoe advised investigating recent sales to understand if your price expectations were competitive and to understand unique selling points.
“And remember that negotiations can sometimes be intense or emotional, but it’s important to remain professional and keep the focus on the sale,” she said.
“This can help build a positive relationship with the buyer or their advocate and ultimately lead to a successful sale.”
Ms Pascoe said sellers should also try to gain a feel for how their agent interacted with buyers. Some will use “aggressive or confrontational” tactics, which could hurt a sale by overwhelming and scaring off buyers.
Seeing them in action at open for inspections could give a sense of the tactics an agent uses.
TENANT TACTICS
In a tough rental market, tenants might feel there’s little they can do to tip the scales in their favour.
But Tenants Victoria lawyer Ben Cording said renters around the country could benefit from forward thinking, by building a rapport with local property managers and keeping records of your interactions.
This could help when a landlord is seeking to split a choice between two or more prospective tenants and asks their property manager input.
“And if the rental needs repair, there are avenues to raise these issues after you sign the lease — so don’t overshare in your conversations with the real estate agent or landlord,” Mr Cording said.
Having references, your ID and pay slips ready to go on short notice, as well as getting in quick for a private inspection if possible, could also help put you at the front of the queue.
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Originally published as Real estate negotiation: Key home tactics for buyers, sellers and renters
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