Buyers: put on your poker face and play it cool, says Edel Morgan
In the current buyers' market, the strength of your negotiation skills can directly relate to the size of the discount you manage to haggle. Some people thrive on the adrenalin rush of bargaining for a discount and they know that successful negotiation is all about timing, preparation, playing cards close to your chest and knowing when to put on that all important poker face - and they are out there doing deals in their droves.
The people who are losing out are the ones who would rather chew barbed wire than play verbal and psychological mind games with a seller or, after years of expecting to pay full price or more in a seller's market, are unsure about how to bargain.
It might be worth learning though. In London - where the market has been slow for longer than here - vendors positively expect hard nosed negotiation. Half of housebuyers paid 6 to 15 per cent under the asking price last year saving up to £37,500 (€50,367) on the average property, according to a survey published by the Woolwich. But where do you draw the line between driving a hard bargain and using tactics that verge on the unethical? Apparently there are buyers scouring the market for what is disturbingly known as a "distress sale" where the vendor needs to sell quickly for personal or financial reasons. Once they identify their target, it's in for the kill, sometimes demanding substantial discounts at the signing stage, leaving the vendor in an unenviable position.
Some take the view that all is fair in the property game. After all, it wasn't that long ago that the vendor was calling the shots. After talking to a negotiations expert I'm told the first step after identifying a property you are interested in is "research and reconnaissance" which roughly translated means "find out how desperate the vendor is to sell" and how long the property has been on the market. The timing of a prospective buyer's bid is crucial. Some vendors/agents set the asking price slightly higher to leave room for bartering. Others start out refusing to budge on the asking price but soften their position after interminable periods on the market. Then there are those who won't reduce their price no matter what - often ending up letting the property or withdrawing it from the market.
Apparently the best way of finding out the vendor's position is to somehow engage them in friendly banter or, failing that, their estate agent or unsuspecting neighbours. The vendor might be in a hurry to sell but a prospective buyer, I'm told, needs to give the impression they've all the time in the world - hence the permanent poker face. A whiff of panic or overeagerness will be picked up by the estate agent.
Before putting in an offer, assess if it's fairly priced and how much competition it has on the road/estate? How much did comparable properties sell for in recent months? Does the property need work to bring it up to standard, ie, new windows, renovation, rewiring, damp, and how much would this cost? Factor these considerations into the bid - without insulting the vendor with a ridiculous offer - and explain this to the agent. Rather than box yourself into a corner with a formal bid immediately, a good move can be to express interest to the estate agent and casually remark that you'd be interested "if only the vendors brought the price down". This can give an indication how low the vendor is willing to go.
If you have mortgage approval and aren't part of a chain, make it clear to the agent, as it puts you in a very strong position. Otherwise keep your financial situation vague. The first bid should be less than your maximum bid and don't show your hand by indicating you are prepared to go higher.
Don't exceed your maximum bid and know when to walk away but leave the door open. Sometimes when a sale falls through the vendor will return to a previous bidder. Finally, when it comes to new homes don't be afraid to ask the developer to throw in extras - or to reduce the price.
