Brushing up on your negotiation techniques with the insider knowledge of a real estate agent can have a big impact on how much you pay for a home.
Buying a house can be an overwhelming experience, particularly if you have your heart set on a place you’ve seen recently.
With inflation uncertainty the volatility in the economy to consider, every dollar you can save on the purchase price can reduce your loan repayments.
By brushing up on your negotiation techniques, you could potentially save tens of thousands on the asking price of a home.
Mortgage Choice has asked some real estate agents to share some of the best negotiation techniques they’ve seen over their years in the industry, which are outlined below.
1. Be prepared
Before you even start negotiating, make sure you know exactly what you’re in the market for and what you can afford in repayments.
Being prepared also means seeking pre-approval and knowing your financial limits, which can give you the confidence to make an offer and walk away. Sitting down with a mortgage broker ahead of your home hunt can make all the difference when it comes to fully understanding your situation.
When making an offer, make sure that the offer is the price you want to pay, not necessarily what the asking price is. If the property needs work, make sure you take this into account when preparing to make an offer.
2. Be transparent
Now isn’t the time to hold your cards close to your chest. Successful negotiation isn’t about certain techniques as much as it is about knowing local agents and building trusted relationships with them, BresicWhitney chief executive (CEO) and director Thomas McGlynn says.
“Be clear and communicate your position and what you’re looking to achieve, along with honest feedback of properties you might have recently seen," he adds.
"This not only helps the agent you’re dealing with, but by extension it helps the seller understand local feedback and where the market is truly at."
BresicWhitney chief executive and director Thomas McGlynn hosting a Sydney auction. Picture: Brendan Read
3. Back your decisions
While being transparent and communicative is important, Mr McGlynn says you should be firm and back your decisions at the same time.
“If you’re steadfast on either price, area or requirements of a home, these are likely very important to you. Don’t feel pressured to compromise," he says.
"Focus on educating yourself too – be present and active in your local market, attend open homes and auctions and research local sales so that you’re informed."
4. Avoid analysis paralysis
It's vital not to get too focused on trying to time the market, or you could get stuck in analysis paralysis.
McGlynn reminds buyers that time in the market will yield far better results that trying to time the market.
“Buying when it suits you financially and in line with your requirements or goals is what’s important. There’s opportunity in almost all market conditions, and the majority of well-located, quality properties, particularly those around the key lifestyle markets of Sydney, will perform well over time."
A great agent who you trust will be able to help you uncover these opportunities and make sense of the market, he says.
5. Understand the demand
All over the country, certain neighbourhoods and suburbs are in greater demand than others, which will impact your ability to negotiate.
Do your research by looking up recent sales in the area to understand what similar properties have sold for. This will give you a benchmark on what homes have been selling for recently, which can help you work out how low you could go without offending the vendor in the process.
6. Consider the economy
A lot can change in a few short months when it comes to property prices, and therefore your ability to negotiate.
There’s a lot of uncertainty out there right now. While one more cash rate cut for 2025 was looking very likely, the release of September quarter inflation figures has all but quashed any chances.
These factors can all impact the market, which could be favouring buyers or sellers at the moment. Check sales history of properties online, and keep an eye on market insights and economic reports to understand what’s happening to the market in the area you want to purchase in.
7. Temper your emotions
Don’t forget that the vendor is selling the property and the buyer is there to purchase, and the agent is there to facilitate the process and manage the communication between the two parties, says Jellis Craig CEO Andrew McCann.
It is important a prospective buyer builds the right sort of rapport with the vendor. Picture: Getty
Even if the agent has just walked you through the home of your dreams, remind yourself that good negotiators temper their emotions and enthusiasm and walk away calmly to gather their thoughts and work out their next move.
“Buyers that handle the negotiations poorly sometimes come across too aggressively and get the vendor offside," he warns. "Once the vendor has emotionally decided that they don’t like the buyer for one reason or another and decide don’t want to sell to them because perhaps the buyer is playing too hard, negotiations can stall pretty quickly."
8. Put an offer in writing
Buyers should be transparent about their level of interest. This means negotiating in good faith and putting their offer in writing.
“The agent has a duty to take all offers to the vendor, and when the offer is in writing, it shows a willingness and intent and builds trust into the process that the buyer is genuine,” Mr McCann explains.
9. Consider the extras
You do have other bargaining tools at your disposal. The conditions of the sale can save you a lot of money, so think through what other elements of the sale could work in your favour.
For example, you may want a 30 day settlement so that you don’t have to find somewhere else to live when your lease runs out. Or, you may want to negotiate that the fridge, piano and garden furniture stays.
These items might be small in the grand scheme of things, but they can add up pretty quickly if you don’t have to cart your fridge to the new house.
With all this in mind, your next purchase could be yours before you know it.
This article first appeared on Mortgage Choice and has been republished with permission.
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