Buying property: successfully negotiating the price

Prospective buyers need not fear the current purchase prices. This is because the current market situation offers good opportunities for negotiation. We have some tips for you on how to approach price negotiations cleverly.

Expertise and preparation are the be-all and end-all for price negotiations. You should know the local property market and how property prices are performing in that market. Some experts will tell you that you should know comparable properties. However, sellers may respond that every property is unique. In turn, you can use this argument when sellers try to justify their selling price.

How much is the property really worth?

The basis of any price negotiation should be a professionally determined property value. A local quality estate agent will advise you on this and determine the value on request. Sellers rarely go to the market with this value. Instead, they pursue a pricing strategy. For example, they set the price higher in order to have room for negotiation. Or lower to increase demand so that interested parties outbid each other.

5 to 10 per cent

A common approach is to make an offer that is 5 to 10 per cent below the buyer’s asking price. A professional tip is to base the purchase offer on how long the property has been on the market. If it has been advertised for several months without having found a buyer, you can make an offer that is 10 per cent below the buyer’s asking price. If the seller needs to sell quickly, you can make an even lower offer. Seek advice from an experienced property professional.

Communicate financing limits

Property experts advise you to disclose your own financing limits to the seller due to the current circumstances. Professional estate agents know how to explain financing options to the seller.

Sensitivity

Of course, it is also important not to enter into negotiations too aggressively. All your reasons for a price reduction should be well-founded and justifiable. For example, are there any structural defects, a need for renovation or are the location and fittings not ideal? An independent property professional can make a neutral assessment of the condition and value of the property.

Arguments from the other side

You should also be aware of the seller’s counter-arguments and be able to respond to them. Don’t be put off by statements such as: “There are several interested parties”. Be self-confident and ask diplomatically how many offers there are, whether the seller is considering them and which offer could win you the contract.

Are you looking for support when buying a property? Get in touch with us! We will be happy to advise you.

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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