These are some tips based on my personal experience of househunting/bidding and general negotiation strategies. All opinions are my own.
Dealing with Estate Agents (EAs) generally
Estate agents are trained negotiators. Housebuyers usually aren’t. So you are in a weakened position from the outset. EAs are trained in selling houses, they work on commission. So for the EA, getting the biggest sale price is in their interest. Getting the house for what you can reasonably afford is in your interest. Doing the deal in some shape or form is in both your interests.
You need to play hard to get - or rather play assertive and prepared to walk away. So don’t ring the EA back too quickly looking for answers and don’t snatch up the phone on the first ring when they call you back, let them leave you a message and get back later that day. Act confident, if they can see you're timid about the whole business, they may take advantage of that fact.
Don't get emotionally involved
One big mistake many amateur negotiators make is to become too emotionally attached to getting the house. Try to play it cool.
Most deals are only possible if both people feel they're getting something out of it. Keep calm, patient and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You're much more likely to do well that way.
Let them believe the final decision doesn't rest with you (‘Limited Authority’ tactic)
Once a negotiation starts, most people want to get it over with as quickly as possible.
Don’t let your impatience beat you.
One great way of buying time is to let them believe the person they're negotiating with isn't actually you, but some other "authority figure". Eg. Your husband or The Mrs, the Bank, whoever. Say something like "Well, I'll have to talk it over with my spouse / partner /solicitor before I can come back to you".
Keep the exchanges with EA really short, if you give a good gabber time they will rush you into something you may not have intended.
Never make a decision in real time with the EA on the other end of the line, always always give yourself time to think.
The EA like any other salesperson may use some phrases to put emotional pressure on you to make an offer, like:
“If they don’t sell it soon they are going to take if off the market and rent it”
“ We’ve had quite a bit of interest in this one”, or “I had another couple over just yesterday actually”
“You’d think things are quiet but we sold 5 houses last week”
“They are in no hurry to sell’ (meaning don’t think they so desperate they’ll sell it for buttons)
Actual Bidding
NEVER give actual figures of how much you have to spend or how much savings you have. Just evade that question completely by saying ‘it depends on the house’.
Pick a walkaway figure and stick to it. This is the very most that you will pay for the house. Pin it up on the fridge. Pick a lower starting point and another midpoint. Use odd numbers like €267,800 euros. It gives the impression that you know something the EA and seller doesn’t. Don’t round it up into nice numbers. Like if you offer 297 they know you’ll go 300 and don’t care about the hundreds. If you offer €263,850 they don’t know where you are going with it, and they also know you respect and are counting every hundred euros in that figure.
Also, you need to establish the situation of the seller – have they moved out, when can they move out, do they have anywhere to go, how soon could they close the deal. Asking this sort of information also shows you are serious about doing the deal.
The bidding process may go something like this:
Expect your first low offer to be rejected out of hand. Expect this, this is normal.
Never increase your offer in the first phone call. You may go through 2 or 3 or more rounds of ‘that’s all we can afford, we will have to leave it at that so, that’s a pity, never mind, we’ll move on so, thanks for your help’ until you get to your walkaway figure, so don’t leap up to it straightaway. In this climate the deal may take weeks or even months to do rather than days.
Never say ‘take it or leave it’ becauses that’s not negotiating.
In an ideal haggling situation in today’s market as a buyer needs to know that you got a ‘deal’ on the house. As a seller, the seller needs to know they got as much out of you as could afford.
So if your first offer had been accepted – you would immediately feel you could have offered less and the seller feels they should have waited and got more out of you. So that’s why the haggling situation can work well so that both parties feel they have given the other party something.
Never run the house down with negative comments or pointing out the bad points in an effort to back up your low offer, you will only annoy the EA. The EA cannot use that sort of info to get the seller to drop the price. Agree it's a great property with great potential but that the money is the issue not the house.
The EA may well refuse your first offer. If the EA thinks you have any more to spend they will try and wring another few quid out of you before taking the offer to the seller. (And they’d be right to, it’s their job!).
Having rejected your first really low offer, the EA may come back with a slightly reduced asking price when they are refusing your offer. This is a signal they are prepared to do a deal and consider you a serious buyer, it’s just a case of can you both do the deal down to your walkaway point. Drop into the conversation the fact that you have viewed another property since seeing theirs, or that you are viewing something else this week. But you still need to say ‘we’ll leave it at that so’ and hang up.
The EA may not come back to you with any reduced asking. In which case if you still really want the house wait a decent period of time (I would suggest 2 weeks in the current market, and to give yourself time for your passion for the house to cool a little) before going back with your increased offer (but still not as much as your walkaway point). Tell them you spoke to your Bank or your parents and got another few euros. Make it like you had great difficulty coming up with the extra money. Impress on them again your position of being mortgage approved, ready to move on it straightaway etc.
The EA is working for the seller but at the same time they are trying to do the deal so they are working for both of you in some respects. Sometimes they are genuinely up against a seller that can’t accept the low offer and it will take a few weeks for the EA to work them down to a figure closer to your price, or the seller may be point blank refusing to lower their price.
Back up any offer with the guarantee that you have the deposit and mortgage approval and are not in a chain.
Good luck.
Dealing with Estate Agents (EAs) generally
Estate agents are trained negotiators. Housebuyers usually aren’t. So you are in a weakened position from the outset. EAs are trained in selling houses, they work on commission. So for the EA, getting the biggest sale price is in their interest. Getting the house for what you can reasonably afford is in your interest. Doing the deal in some shape or form is in both your interests.
You need to play hard to get - or rather play assertive and prepared to walk away. So don’t ring the EA back too quickly looking for answers and don’t snatch up the phone on the first ring when they call you back, let them leave you a message and get back later that day. Act confident, if they can see you're timid about the whole business, they may take advantage of that fact.
Don't get emotionally involved
One big mistake many amateur negotiators make is to become too emotionally attached to getting the house. Try to play it cool.
Most deals are only possible if both people feel they're getting something out of it. Keep calm, patient and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You're much more likely to do well that way.
Let them believe the final decision doesn't rest with you (‘Limited Authority’ tactic)
Once a negotiation starts, most people want to get it over with as quickly as possible.
Don’t let your impatience beat you.
One great way of buying time is to let them believe the person they're negotiating with isn't actually you, but some other "authority figure". Eg. Your husband or The Mrs, the Bank, whoever. Say something like "Well, I'll have to talk it over with my spouse / partner /solicitor before I can come back to you".
Keep the exchanges with EA really short, if you give a good gabber time they will rush you into something you may not have intended.
Never make a decision in real time with the EA on the other end of the line, always always give yourself time to think.
The EA like any other salesperson may use some phrases to put emotional pressure on you to make an offer, like:
“If they don’t sell it soon they are going to take if off the market and rent it”
“ We’ve had quite a bit of interest in this one”, or “I had another couple over just yesterday actually”
“You’d think things are quiet but we sold 5 houses last week”
“They are in no hurry to sell’ (meaning don’t think they so desperate they’ll sell it for buttons)
Actual Bidding
NEVER give actual figures of how much you have to spend or how much savings you have. Just evade that question completely by saying ‘it depends on the house’.
Pick a walkaway figure and stick to it. This is the very most that you will pay for the house. Pin it up on the fridge. Pick a lower starting point and another midpoint. Use odd numbers like €267,800 euros. It gives the impression that you know something the EA and seller doesn’t. Don’t round it up into nice numbers. Like if you offer 297 they know you’ll go 300 and don’t care about the hundreds. If you offer €263,850 they don’t know where you are going with it, and they also know you respect and are counting every hundred euros in that figure.
Also, you need to establish the situation of the seller – have they moved out, when can they move out, do they have anywhere to go, how soon could they close the deal. Asking this sort of information also shows you are serious about doing the deal.
The bidding process may go something like this:
Expect your first low offer to be rejected out of hand. Expect this, this is normal.
Never increase your offer in the first phone call. You may go through 2 or 3 or more rounds of ‘that’s all we can afford, we will have to leave it at that so, that’s a pity, never mind, we’ll move on so, thanks for your help’ until you get to your walkaway figure, so don’t leap up to it straightaway. In this climate the deal may take weeks or even months to do rather than days.
Never say ‘take it or leave it’ becauses that’s not negotiating.
In an ideal haggling situation in today’s market as a buyer needs to know that you got a ‘deal’ on the house. As a seller, the seller needs to know they got as much out of you as could afford.
So if your first offer had been accepted – you would immediately feel you could have offered less and the seller feels they should have waited and got more out of you. So that’s why the haggling situation can work well so that both parties feel they have given the other party something.
Never run the house down with negative comments or pointing out the bad points in an effort to back up your low offer, you will only annoy the EA. The EA cannot use that sort of info to get the seller to drop the price. Agree it's a great property with great potential but that the money is the issue not the house.
The EA may well refuse your first offer. If the EA thinks you have any more to spend they will try and wring another few quid out of you before taking the offer to the seller. (And they’d be right to, it’s their job!).
Having rejected your first really low offer, the EA may come back with a slightly reduced asking price when they are refusing your offer. This is a signal they are prepared to do a deal and consider you a serious buyer, it’s just a case of can you both do the deal down to your walkaway point. Drop into the conversation the fact that you have viewed another property since seeing theirs, or that you are viewing something else this week. But you still need to say ‘we’ll leave it at that so’ and hang up.
The EA may not come back to you with any reduced asking. In which case if you still really want the house wait a decent period of time (I would suggest 2 weeks in the current market, and to give yourself time for your passion for the house to cool a little) before going back with your increased offer (but still not as much as your walkaway point). Tell them you spoke to your Bank or your parents and got another few euros. Make it like you had great difficulty coming up with the extra money. Impress on them again your position of being mortgage approved, ready to move on it straightaway etc.
The EA is working for the seller but at the same time they are trying to do the deal so they are working for both of you in some respects. Sometimes they are genuinely up against a seller that can’t accept the low offer and it will take a few weeks for the EA to work them down to a figure closer to your price, or the seller may be point blank refusing to lower their price.
Back up any offer with the guarantee that you have the deposit and mortgage approval and are not in a chain.
Good luck.
