In This Week’s How’s The Market | Edition 153
Some of the properties I see sell and the stories I hear from potential clients and agents in the marketplace shock me.
So many people are overconfident when it comes to negotiating and can cost themselves hundreds of thousands of dollars
Below are the 5 biggest mistakes I see buyers make and how to avoid them so you can get better results.
#1 Negotiating Against Yourself
Buyers will increase their offer without the agent even presenting the offer to the vendor.
This is a shocking idea.
You want to anchor the vendor early as well as the vendors and if you’re negotiating, you want the vendor to come back to you with a realistic number.
Just yesterday I had an agent say that they don’t think the vendor will accept any offers with conditions on it.
I reframed the offer and asked the agent to present it and get a counteroffer back.
I have seen inexperienced buyers crumble when having these uncomfortable conversations with agents and then remove conditions or improve their offer without the vendor even seeing it.
Hold firm.
Get a response from the vendor with an actual number that would buy the property and get some movement from their end to initiate a serious negotiation.
Don’t increase your offer against yourself first.
#2 Not Understanding Other Buyers’ Terms
The agent may tell you that another party has made an offer for more money – but is that offer really real?
What terms do they have?
Are they subject to anything?
What is their settlement timeline?
Is their offer on a contract or verbal?
Why isn’t their offer on a contract if it’s so good?
I have heard agents say there is a higher offer, only to find out it’s not on a contract because they are in the final stages of finalising their pre-approval before writing it up, and then they turn out to be offering on another property as well…
The agent was trying to use the imperfect picture to get us to increase our offer by omitting crucial information.
There may even be another offer on a contract that’s unconditional; however, if it has a 180-day settlement and the vendor needs 30 days, your offer subject to B&P at 30 days and $40k less could actually be much stronger.
Agents will still try to get you to increase your price based on the other offer, even when your offer is currently winning.
#3 Making Pre Auction Offers When The Campaign Is Weak
Yes I get it – auctions are scary.
Though negotiating via a pass in negotiation is one of the times when you will have the MOST leverage as a buyer and you have to take advantage of that when the opportunity presents itself.
Especially in markets like what we are in right now, when auctions are passing in more times than they are selling.
In saying this, there still could be a great opportunity to purchase pre auction as well.
So how do you know which route to go down?
Speak with the agent clearly throughout the campaign.
Understand what the competition is looking like.
Has anyone completed a building and pest inspection the week of the auction?
How many people have requested contracts?
Has anyone asked to negotiate settlement terms?
Has anyone tried to make a pre-auction offer?
How many groups have gone through?
What are the settlement terms?
Have the vendors bought?
If you ask agents these specific questions, you are likely to get a response that will help you shape a picture of the entire situation and that should give you a read on what to offer and when.
#4 Not Pushing Terms Hard Enough
You can make so much money from adding terms in your favour.
If you are upsizing and need to sell, push for a license agreement to occupy the property early so you can get your property ready for sale.
Or maybe you buy with a 180-day settlement period and add a clause that grants you the ability to bring the sale forward to 30 days at your sole discretion when you sell your property to organise a simultaneous settlement.
Or if you’re selling first, putting a lease-back clause in so that you can rent your own property for a period of time if you’re unable to purchase.
Adding good working order clauses so that if there are appliances or hot water not working at the pre-settlement inspection the vendor agrees to pay for them fully to be replaced and fixed.
Or a clause requiring the property to be professionally cleaned prior to settlement.
And keep a B&P clause in there please.
Make sure to ask your conveyancer for specific wording on these clauses and get them inserted into the contract at the time of your offer.
#5 Using Price Guides Instead Of Comparable Sales
Please… for the love of god – stop using price guides to decide your offer.
I speak with buyers and clients about this every week.
These price guides mean nothing, no matter what the agent tells you.
The only way you should be determining what you think the property is worth is by comparable sales in the area.
What The Agents Are Saying
Stock is becoming limited in the upper end markets.
With so many pass ins, some vendors are opting to wait until the end of the year to sell so they can see what happens with the Melbourne market.
Some agents I know have even encouraged vendors to hold on until later in the year as they agree that the market is not strong at the present time.
It seems the uncertainty is creating some stock shortages in some markets, however, this is not across the board.
Many agents are still telling me that they are selling listings, but they need to be much more strategic about how to handle negotiations.
Many agents are pushing auctions out by weeks if they don’t have buyers, converting campaigns to private sales and trying to sell prior to auction if interest levels are low.
Stock is still selling, though it is more complicated than simply selling everything at auction under the hammer right now.
If the vendors expectations aren’t in line with the market, properties simply are not selling.
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Final Thoughts
Negotiation in Melbourne’s property market is not just about getting a good deal.
It is about understanding where the market truly sits.
Data alone is not enough.
Real-time insight, competition awareness, and confidence in pricing are essential.
Buyers who combine these elements put themselves in a stronger position.
Those who do not will continue to struggle, regardless of budget.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at [email protected]
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
