How To Negotiate?

How To Negotiate?
The nervy part to a lot of Vancouver First Time Home Buyers are negotiations. What should I offer, where do I start and where should I finish? These are common questions we deal with a lot. Well I’m sure you’ve heard the age old saying ‘Negotiation is an art’, and it’s true. The wrong negotiation tactic can actually have the opposite effect for you.

Walk with me (in thought) down this path and imagine. Let’s say you have found this perfect home of yours and are now at the offer stage. This home is listed for $625,000. It’s priced effectively, judging by other very similar units in the building. You decide you want to try your luck and offer a low ball offer of $600,000. 

There is no justification for this offer, other than the fact you want a discount and the seller is going to know this, if not their agent definitely will. You’ve now tried ripping off the seller and they are annoyed. It’s not uncommon for them (as they are human just like you and me) to come back resentful and say something like “Nope! That’s it, if they want it they’re paying full price”.

Congratulations! Your ‘want to get a discount’ approach has now made you pay nothing less than full asking price. When in fact, some strategic - key word strategic - tactics could have landed you a property for $5,000, $10,000 or $15,000 off.

Now on the other side, let’s say you added some justification to your offer. Your agent (hopefully) noticed that the comparable solds in the building actually have a better view as they are 4 floors higher. Well at $2,500 a floor and 4 floors higher, that justifies your want to put in an offer at $620,000 ($10,000 off the asking price). Maybe the other comparable is in better condition, has a renovation or is currently vacant so can be moved into faster, and that becomes a part of your negotiations. Each home will be different, the key is not to look at trying to nickel and dime someone, it’s to put justification into your offering.

Price is not the only negotiable too, if you’ve followed our previous blogs you will have read you can negotiate on terms such as closing dates and subjects too. Check out our blog here for more information on that.

It’s important to realise when to negotiate and how. A common confusion in this market with new home purchasers, is that it’s a buyers market and therefore you should never be paying full asking price. Well it’s been this way for a time now, and sellers are aware of this. You’re seeing a lot more properties come on the market listed at reduced prices to reflect this market correction. These new prices, a lot of the time, are priced to sell. While you are looking for ways to bring that down further, a prudent agent and client could swoop in and steal it from you while you’re still in the negotiation stage. Something becoming more and more common in this market.

The moral of the story being - ‘Make sure you have justification with your offers’. If you are making an offering and can justify the WHY, when the agent presents it, you are drastically increasing your chances of either acceptance or effective negotiations from there.

So with that final sentence, we’re done for the week. For more Vancouver First Time Home Buyers information, check out our monthly seminar and register today, it’s free after all.

Vancouver First Time Home Buyers we love YOU!!!

Until next week,

chao!

Jay Mcinnes
T: 604.771.4606
jay@mcinnesmarketing.com

Ben Robinson
T: 604.353.8523
ben@mcinnesmarketing.com