Essential Negotiation Tactics When Buying A Property That Realtors Don't Want You to Know
When buying a property regardless whether it’s a HDB or a private condominium, negotiation is an important part of the process. It’s a way to get the best deal possible and can make all the difference between getting what you want and settling for less-than-ideal terms. Here are some essential negotiation tactics to consider when property buying. As a bonus, I’ll share with you some statements you must avoid mentioning while visiting a property for the first time (if you want to get the best deal!).
Do Your Research
Otherwise, this provides the opportunity for the seller to quote a price greater than the going market rate. If their marketing uses phrases like “view to offer” or “beginning at,” there is no set price being advertised for this residence. Furthermore, this also prevents you from making a lesser offer. It wouldn’t make sense to give them an offer that is less than the one they already got.
Additionally, the latest offer provided by the seller or agent is invalid or phony most of the time. Nothing compels them to provide you with evidence. Therefore keep in mind to not ask these 2 questions.
Check out our article on 5 Costly and Common Mistakes Homebuyers Make in the link here.
Don't Make Emotional Statement
Negotiations should be based on logical considerations such as property condition and market value rather than emotional ones such as your parents residing nearby or the fact that you used to study in a school nearby or an immediate connection with the property.
This is especially relevant when property buying, as these statements may lead the seller to think that you’re desperate for the property and willing to pay any amount of money for it. This puts them in a strong bargaining position where they can ask for a much higher price than what the property is worth.
Avoid saying things like “Oh, I have to have this house! It’s near my grandparents and I would love to stay near them”.
These emotive highlighters show:
- The rationale for your interest in this house.
- That you have a deep emotional connection to this building, community, or condo.
Having a great interest in a property may cause the seller or agent to hold off on negotiating until you become more desperate. Sellers may also assume you enjoy the apartment, and may frequently try to exhaust and annoy buyers to get them to raise their offers or accept their conditions. Here are 3 tips to help you pick your dream home.
Agents are taught and programmed to trawl for information from prospective buyers who drop by for a showing through hours and hours of sales/negotiating training and seminars. A skilled agent will always engage you in discussion before you enter the property, keep it going, and successfully guide it until you depart. They may even have had training and subconscious techniques to gather details on you, your family, and your routines.
Avoid Mentioning Unnecessary Information
This pointer is similar to the previous pointer and is crucial, so do heed it. Although it might not apply to everyone, it is nevertheless important to note. Only in Singapore can parents go through the trouble of moving their residence to better their children’s education.
Every homeowner who lives close to a respectable school where parents are reportedly competing tooth and nail for their children to enroll is thus already aware of the issue or will be informed of it by their agent, neighbor, family, or friends. This merely indicates that they are truly on the lookout for parents of small children entering primary school eventually.
So you need to keep this important knowledge to yourself. It is advised to leave the children at home or in the hands of someone trustworthy while you go for a viewing. This is because if children are present during viewing and the seller happens to ask them which school they might be attending and upon being questioned, they are more likely to mention a nearby school or anything their parents may have told them about their chosen school. A statement that negates all prospects of negotiation. This also allows the seller to be even more aware of the demand for their property. Hence, avoid bringing children for viewing to give sellers clues.
Avoid Making Any Statements About The Property
If you have read the previous three points, you might be aware of the mistake of making statements like “the house is nice,” “the renovation looks beautiful,” or “I like this home’s wonderful qualities.”
Generally, all homeowners are proud of their homes. Most homeowners genuinely love their homes, and even those who don’t will act and present themselves with pride when the time comes to sell. It is advised that you should keep your opinion of the property to yourself. Refrain from mentioning anything about how nice or bad the property is or about property flaws or any other issue which may make the property seem unfavorable to a potential buyer.
When you mention positive things, the seller will essentially get prompted to think that there is no room for negotiation since you like the unit. Furthermore, they are more likely to anticipate an offer that matches the asking price or more because you have shown their love for the home so strongly.
On the other hand, many buyers use the opposite strategy of criticizing the home to reduce the price. This is a worse approach if you love the house. Instead of wasting your time criticizing a property, keep in mind that it is still the owner’s home. Being in their bad books is a terrible way to begin the discussion because they are residing there, therefore be more mindful and learn to respect the house.
Refrain from Mentioning Your Financial Budget
When property buying, you should refrain from sharing too much information with the seller. (but do share with your agent if he is representing you!) This is especially relevant when negotiating prices. If a person knows your background and financial status, they can use this as leverage to demand more money than what the property is worth.
It is a bad idea to give the opposition access to your budget. For instance, if you went to a street seller in another country and said, “I have $100 to buy your things, but may I negotiate for $50?” The merchant wants to rob you of as much money as they can.
Nevertheless, many purchasers believe that disclosing the information to the seller’s agent is customary. Without asking, there have been buyers providing information about their salaries, bonuses, CPF balances, and loan amounts. Since the seller is aware of all of your personal information, buyers believe that providing information won’t have any impact on their decision to buy or not, or at what price as it is ultimately their decision.
Remember, sometimes it is good to stay “mysterious”. Don’t show your hand so quickly when you are buying a property!
On the other hand, if you have an agent representing you, it will be to your advantage to share these information with your agent. Assuming you like a property but is short of $50,000 after negotiation. Well, a buyer’s agent may be able to advise you on some creative financing and teach you how to increase this loan amount. Moreover, your agent may even be able to negotiate a better deal for you on the property you are keen in.
Here are 3 questions you must ask yourself before buying your dream home.
Have you ever wondered why, during a showing, the seller tries to maintain a poker face while sitting calmly in one place and focusing only on the prospective buyers who visit? Agents teach them how to maintain composure and gather as much information as they can about prospective customers when they enter. To discuss and exchange information with the agent after the conversation, the seller serves as the CCTV during the viewing.
Important things to take note of :
- Even if you remain in the same area, project, or neighborhood, mention that you reside on the other side of Singapore and want to move.
- Whether you have children today or plan to in the future, the seller does not need to be aware of the history of your family or the current residences of your family. These are all unrelated to sales and purchases.
- It doesn’t matter what the seller is trying to receive for the house; what matters is what you can afford to pay. Do your homework and present a confident but reasonable offer, as result, to prevent offending the seller and ending the deal.
- Keep in mind that school is a sensitive subject and that agents and sellers want to hear this.
- Stay the course and keep in mind that neither the seller nor the seller’s agent is your ally. Don’t be manipulated by the agent’s showmanship and negotiating techniques.
If you are an avid reader of my pieces, you will know that buying and selling property is an art. In fact, Sun Zi’s The Art of War is relevant to property investment, and I actually used some of the concepts in the book and applied it to my experience in purchasing investment properties.
Negotiation tactics play a great role in determining whether or not you get a good deal when buying property. Feeling stressed? Let me help you. Let me handle all the tough work and financial matters. I will coordinate and go through the entire process with you to ensure a reliable and hassle-free experience as you embark on your journey to invest in property.