Negotiation Skills for Resale Home Buyers
How to negotiate home price when buying your first dream home?
You’re looking for a new home to buy in the resale property market and you’re lucky enough to find a property that has everything that you need, most of the things you want, and it’s also in your price range. You’re tempted to put down an offer immediately, but this is where things get complicated; you don’t want to offer something that’s too low and insult the home seller or risk losing the property to someone else. At the same time though, you want to avoid bidding too much or beyond your budget for the house. So how do you determine the right price for a resale property when making an offer?
There are no real rules about making the right offer on a house, but there are some factors to keep in mind to make the right choice.
Know Your Home Budget Limit
Always research and find out just how much you can really afford and what your maximum offer will be before entering a negotiation. Take a look at how much similar properties nearby are cost, along with historical transactions and the property itself. You may check out the historical transaction data on URA’s official website. Having plenty of information to hand gives you the confidence to negotiate better and helps you understand the limits of what you can – and should – be offering. If the resale price of a nearby property that compare with the list price of the property, then this is a good indication that your offer should be close to the asking price.
Don’t Offer Too Little
While offering an amount below your limit price is common practice in home buying negotiations, you shouldn’t low balling the seller or you risk putting off the seller. Even real estate markets in third world countries will ignore or admonish you if you attempt this particular practice when making an offer. Avoid playing mind games with a seller and testing their patience. Be genuine and fair in order to build up some trust. When the other party trusts you, they may be more willing to offer some leeway in some areas.
Consider How Long the Property has Been on the Resale Market
Consider both how long a property has been for sale and how incentivized the current owner is to sell the property. If the seller has plans to migrate in the next few months they are going to want to sell the property urgently. This gives you a better chance of having a lower offer accepted. If someone is casually putting their home on the market to test the waters and find out how much they can get through, then they are more likely to deny anything less than their ideal price.
Home Buying Price Negotiations can Take Time
If you’re lucky you’ll be making the right offer on a home and closing the negotiations in minutes, but they can also take weeks and plenty of back-and-forths to finish. It’s important to be prepared for this and avoid getting so committed to a deal that you have trouble walking away if someone rejects the highest price that you can offer them. Stay positive and remember there are plenty of chances waiting out there on the resale property market in Singapore, so don’t worry that you might be unable to find something to suit your needs.
The Seller is Trying to Understand You
Just as a home buyer tries to understand the wants, needs, and limits of a seller, the seller wants to do the same to you. Knowing these things gives you some edge during the negotiations and allows you to move things in your favor. That is why you should avoid giving away too much. Keep your body language under control as well. If you’re a first time home buyer and keeping your emotions in check then you may feel tense. This is normal. Stay confident and show the seller that you’re going to take home negotiations seriously.
Negotiation skill is a Lost Art
The reality is that Singaporeans are losing the ability to negotiate. People rarely haggle over prices at all these days, meaning that the skill is becoming lost and forgotten. This goes back to our daily lives. How often do you find yourself negotiating something during the day? You go shopping at the NTUC fair price and pay the price on the label. When you order a cup of coffee from Starbuck, you pay the set price. When you go to a store to try and find clothes and toys you look for discounted prices and offers and would never consider asking if you could get a discount on a product off the shelf. You might be an expert when it comes to negotiating and getting others to see things your way, but the reality is that never negotiating and being conditioned to buy things at “full price” puts you at a disadvantage. This is why working with expert property agents can be a great help.
Feel stuck and aren’t sure how to toot your own horn without sounding full of yourself? Check out our list of new launch developer units where the price is controlled.