6 tactics you can use to negotiate a good deal

There’s a lot of money at stake when you buy a house. You will literally spend hundreds of thousands of dollars.

So you need to negotiate to make sure you get a good deal.

But most of us only buy a house once a decade (at most). So here are the six tactics I use when I negotiate on behalf of my clients. You can use these the next time you’re looking for property.

#1 – Sign the contract first

This might seem counter-intuitive. You sign the contract to buy a property as the first step in the negotiation.

But (and this is important) it must be a conditional contract. That means you can cancel the contract, but the seller can’t. At least not for a period (e.g. 14 days).

This increases your bargaining power.

This means you have the legal right to buy the property for an agreed price. And the current owner can’t sell the property to someone else.

Just make sure your contract has a Due Diligence or “Right to Cancel” clause. That way, you can still get out of the contract.

With this in place, it’s time to negotiate.

#2 – Ask for a price reduction

Like the saying goes: "If you don't ask, you don't get".

Once you’ve got the property under contract, the seller will get excited.

As the ‘unconditional’ date gets closer, they’ll think the property will sell. They may even start to spend the money in their head.

That’s when you ask for a price reduction. When they are emotionally invested.

But don’t worry. You don’t have to call the agent and have a hard conversation. At this point, you’ve got the property under contract. So you have the conversation through your lawyer.

I recommend you say something like: “I am happy to go unconditional if I get a $20,000 price reduction.”

This makes the deal sound solid.

The seller starts to think, “Maybe I should lower the price. That way, I get a sale. If I say ‘no’, I need to open homes and find another buyer again”.

Simply asking for a price reduction doesn’t mean you get one. This is why the next step is essential.

#3 – Give reasons why the price should go down

Trust me, if you ask a seller for a $20k discount without any reason… they'll probably say no. They may think you’re trying to take the mickey.

But if you've got a building report that says some things are wrong with the property, you can use that as a reason.

You might say, “This property needs a bit of work. I’ll need to spend money doing it up. I didn’t know that when I made my first offer. So the price needs to go down for me to make this purchase work.”

You can also research what similar properties have sold for. If you see that similar properties sell for less, use this as evidence for your price reduction. Most of this data is available on Homes.co.nz and OneRoof.

Another option is to hire a professional valuer. They will give you a sense of what similar properties are selling for. If the value they give is lower than your offer, you can use it as the reason for the price reduction.

#4 – Ask for other things

Not everything is about price. You want as many ‘bargaining chips’ in any negotiation.

Even if you can't negotiate a scorching hot price, there may be other things that are valuable to you.

Things like:

• the seller leaving certain appliances or furniture
• putting down a lower deposit when you go unconditional
• a longer settlement timeline (e.g. 8 weeks rather than 4)

Think about what you want (other than the price). These can make the property more valuable to you.

#5 – Dangle the deposit

In the "good old days", I used to attach a cheque to any offer I made.

When the seller got the offer, they could see the cheque. It made the offer feel solid. Like I would 100% buy the property.

It shows you had the money ready to commit, and it’s enticing for sellers to see the money.

This doesn’t happen as much anymore since banks have phased out cheques. But the principle remains the same.

You can still put in the contract that you’ll pay the deposit when the seller accepts the contract. The real estate agent might push your offer above others since they know you’re a serious buyer.

#6 – Be ready to walk away

Finally, you can’t negotiate unless you’re prepared to walk away. If you can’t walk away, you’ll constantly second-guess yourself.

This often happens when you buy your own home. One spouse usually wants to play hardball on price. But the other spouse wants the house and is willing to pay for it.

So make sure you can walk away. Remember, there will always be other deals.