Property negotiation techniques that actually work

Most advice about property negotiation is about confidence. Almost none of it is, and treating it that way is why buyers lose. Property negotiation is an evidence contest between one person who does this weekly and one person who has never done it before. The way you close that gap is not nerve. It is preparation you can show.

The one principle underneath all of it

A discount you ask for is a favour. A discount you can evidence is arithmetic. Vendors refuse favours easily and argue with arithmetic badly.

This is why the work happens before the conversation. Every technique below is a way of turning something you feel into something the other side has to answer.

Before you say a number

1. 1
   Build a defensible value from sold comparables

   Not listings, which are marketing. Sold prices for genuinely similar homes in the same area within the last six to twelve months, adjusted for size, condition and land. Write down the three that most resemble the property.

2. 2
   Write your walk-away number and put it somewhere physical

   A number you hold in your head is a mood. A number on paper in your pocket is a decision you already made when you were calm.

3. 3
   Get the contract and reports read before you engage

   Findings are your leverage, and leverage only exists before you sign. After exchange, everything you find becomes a problem you own rather than a point you can trade.

4. 4
   Cost the defects properly

   Get written estimates for anything material. A quote from a trade is negotiating currency. An opinion that the roof looks tired is not.

5. 5
   Learn the vendor's situation

   Have they bought elsewhere? Is it a deceased estate, a separation, a relocation with a start date? Motivation shapes what they will trade far more than the asking price does.

Anchoring, and how it is used on you

The first number in any negotiation exerts a pull on every number after it. In property the vendor almost always anchors first, through the asking price or the guide, and both are set with anchoring in mind.

You cannot usually anchor first. What you can do is refuse to accept their anchor as the reference point. The move is to answer a price with a valuation rather than with a counter-price:

The offer now has a visible derivation. Countering it means arguing with the comparables, which is a much harder conversation to have casually.

Terms are currency, and most buyers spend none of it

Price is one dimension of an offer and buyers treat it as the only one. Vendors have preferences across several dimensions, and some of them cost you nothing.

• ✓Settlement length - a vendor who has bought elsewhere may value a matching date more than $20,000
• ✓Deposit size - a larger deposit signals certainty without changing what you ultimately pay
• ✓Early release of deposit - genuinely valuable to a vendor, and genuinely risky for you, so it should be paid for
• ✓Fewer conditions - if your finance is already unconditional, that is worth naming out loud
• ✓Inclusions - appliances, blinds, air conditioning, remotes: cheap for them, expensive for you to replace
• ✓Certainty of timing - naming a firm exchange date is worth more than most buyers realise

Turning findings into money

This is where a document review pays for itself several times over. A finding is only worth something if you can put it in front of the agent in a form they cannot wave away.

A usable point has four parts:

1. 1
   The quote

   The actual words from the actual document. Not a paraphrase. Paraphrases get disputed and quotes do not.

2. 2
   Where it came from

   Document and page number. This single detail changes the tone of the reply you get, because it shows you have read it.

3. 3
   What it costs or risks

   A number where one exists, or a clearly named exposure where it does not.

4. 4
   What you want done

   An amendment, a price adjustment, or a warranty. A concern with no ask attached is just complaining.

Silence, deadlines and the counter

Three tactics that work in both directions, so it helps to recognise them being used on you.

Silence after your number

Say your offer and then stop talking. Buyers negotiate against themselves in the pause, adding justifications and sometimes adding money. Let the silence be the other person's problem.

Your own deadline

An offer that stands until 5pm Thursday is materially stronger than one that hangs open while the agent shops it. Open-ended offers are used as a floor to lift other buyers.

Deciding your counters in advance

Before you make an offer, write down what you will do at each likely response: accepted, countered at X, countered at Y, rejected. A decision made in advance beats one made in a hallway with your heart rate up.

Five ways buyers lose money without noticing

• ✓Answering “what is your budget?” honestly, which sets the floor for everything after it
• ✓Falling in love out loud - enthusiasm at an inspection is priced in immediately
• ✓Negotiating price while ignoring terms, which leaves free money on the table
• ✓Signing first and reading later, which converts every finding from leverage into a liability
• ✓Bidding to win rather than to buy, which is what auctions are engineered to produce

Where the evidence comes from

Every technique on this page depends on having something to point at. TrueBuy reads the contract, the strata report and the building report and returns each finding with the quote and the page, then drafts the message to the agent for you to edit and send under your own name.

Common questions

Information, not legal advice. Confirm with your conveyancer before acting.