There are definitely secrets to negotiating well. However, when it comes to property, those skills are going to be affected by the state of the property market at the time of the negotiation, the seller’s requirements and the property itself.
Everyone will tell you that we are currently in a buyer's market. What this essentially means is that there are more sellers than buyers and those who are serious about selling may have to lower their expectations when buyers make lower offers. However, there are areas in South Africa where the market has turned and the demand is such that sellers are once again calling the shots and are getting the full asking price for their realistically priced homes. Knowing which type of market you are dealing with is one of the first points that buyers should research as it is going to have a direct effect on the negotiations.
It is not the only research that should be conducted before venturing out into the big wide world of property. Although estate agents will tell you that they represent both the buyer and the seller, realistically, they represent the seller. That said, they also have certain obligations or duties towards the buyer and as such, can prove to be a wonderful source of information for those looking to buy a home. Agents who specialise in a certain area tend to be au fait with local market conditions. They are also usually fully aware of why a seller has placed his property on the market, how urgent the need to sell is and other factors that may influence the price.
Once you have garnered enough background information on an area the house hunting can begin in earnest. Buying a property is a major decision and should never be rushed. Luckily, in a buyer's market, all the cards are stacked in the buyer's favour and in addition to being able to take their time, buyers tend to be in the pound seats when it comes to the negotiation process.
Knowing what sort of offer a seller will consider is key. Going in with a ridiculous offer could well upset the apple cart and put a damper on future negotiations. The general advice is for buyers to offer around 10 percent less than they are willing to pay. The seller should come back with a counter offer and the negotiations can then begin in earnest. The sad part (for sellers at least) is that because buyers are thinner on the ground in a buyer’s market and as such fewer properties are sold, they have to 'bargain' with the buyer. If they are not willing to compromise and lower the price, it's pretty certain that someone else out there will.
Sellers are fully aware of this and are far more open to offers during these periods than in a seller's market, when buyers are literally queuing up to purchase a home. They may not like the fact that they have to sell during a 'difficult' period, but reality often forces their hands and most will end up selling at below the asking price.
One very important thing that all buyers need to remember is that property is a long-term investment. Buying something that you don't like, just because the price is right, may not seem like a big deal, but living in a home that you despise and having to make concessions with a property that doesn't suit the family's needs, could well take any enjoyment out of the deal.
