Time to read : 4 Minutes

Buying property isn’t like picking up a loaf of bread from your local supermarket. You can’t just waltz in, tap your card, and stroll out with your dream home. Real estate is a game of strategy, psychology, and quite often a bit of luck as well.

If you’re serious about landing your perfect place, there are a few tips and tricks to playing your cards right. And as a former mortgage broker, I’m going to share these with you. 

Important: this article focuses on private treaty sales, not auctions. Home auctions have legislated do’s and don’ts you must follow which vary by state. 

Keep in mind though that some properties which are advertised as going to auction will end up being sold privately. So if you’re looking at properties for auction, read on as you may still get some great pointers. 

Price smart, not lowball

Look, we all love a bargain. But offering $400K for a house listed at $500K is like asking for a brand-new car at half price – it’s completely unrealistic. 

Real estate agents are legally required to lay every single offer they receive before their client. If you start with a ridiculously low offer, what are the chances the seller will take your next (perhaps real) offer seriously? 

Lower, right?

Some people think lowballing is a genius negotiation tactic. In reality, it’s a great way to get your offer thrown in the bin. Home vendors are human too, and if they feel disrespected, they might just instruct their agent not to deal with you at all.

Instead, do your homework:

• Research recent sales in the area.

• Check what similar properties have sold for recently.

• Make an offer that’s competitive, but leaves room for negotiation.

If you start in the right ballpark, the seller is more likely to engage rather than move right on to the next interested buyer.

Cracking your seller’s secret

Understanding your vendor’s motivations can give you a strategic advantage.

Here’s the trick: make friends with their real estate agent. Seriously, be nice. Ask questions. Get the inside scoop.

Find out:

• Why are they selling? Divorce? Downsizing? Chasing their kombi van dreams around Australia?

• Have they already bought elsewhere? (A seller in a rush is a seller open to negotiation.)

• Do they need a long or short settlement?

Once you know the vendor’s motivations, you can tailor your offer to make their life easier – which, in turn, can make your offer more attractive.

For example, if they’re desperate for a quick sale, an unconditional offer with a short settlement timeframe could put you ahead, even if someone else offers slightly more.

Houses are like buses

I once worked with one of the most successful property deal makers in New Zealand. He used to say: "Houses are like buses. There’s another one around the corner." 

He taught me that, no matter how much you think a place is your dream home, if the terms aren’t good for you, you always have the power to walk away – and you should, rather than place yourself under undue financial stress.

Let’s say the seller is fixed on getting $700K, and you’ve offered $680K. Do you really think they’ll just say “Sure, why not?” and accept? They could, but it’s probably unlikely.

Negotiation is a dance. If you dig your heels in and refuse to move, you’ll probably end up walking away empty-handed. On the flip side, if you cave too quickly, you’ll wonder forever if you could have saved some cash.

Here’s how to win the negotiation game:

• Start with a strong, research-backed offer.

• Be flexible, but firm by knowing your limit (and holding to it).

• If the seller won’t budge and the price is unreasonable, have the confidence to walk away.

Remember: there will always be another bus… or house, but overpaying could haunt your finances for years.

Clean offers win deals

Sellers love clean offers. What does that mean? Fewer hoops, less hassle.

A “clean” offer is one without excessive conditions – because let’s face it, a seller isn’t going to choose the offer loaded with clauses when they have a simpler, straightforward one to consider.

If you’re confident about the property you want and your finances are in order, it may work in your favour to drop any unnecessary conditions like longer settlement periods, or requesting expensive upgrades before settlement.

A clean, unconditional offer signals that you’re serious, and if the seller has two similar offers, yours is way more likely to win.

Bottom line

At the end of the day, getting the home you want isn’t about being the flashiest bidder. It’s about playing smart and straight.

• Know your numbers and your limits.

• Understand the seller’s motivations.

• Be prepared to negotiate.

• Make your offer as attractive as possible.

Before you know it, you’ll be holding the keys to your new property, instead of standing outside wishing you’d played your cards differently. And hey, if it doesn’t work out? There’s always another house…like buses, remember? 

Happy house hunting!

Go deeper:

• What's a buyer's agent and are they worth it?

• Can government schemes help you get on the property ladder?

• Are there any extra costs I should know about when buying a property?

Financial disclaimer

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.