When you are buying a property, you will in most cases, need to negotiate through your real estate agent. While it can be tempting to negotiate yourself, you expose yourself to risk. Your real estate agent knows more than you do about negotiating for properties. If you feel strongly that there is something that he is not doing right, discuss it with him instead of trying to negotiate for the property yourself. Sometimes a home seller may contact you directly; always redirect them politely to your real estate agent.
Properties that are up for sale will usually have a quoted price and what the seller expects to get for it. You can make a counter-offer through your agent, who will put it in writing for you to sign. The owner of the property, if he accepts your offer, will sign the document. This is hardly the case though and usually, several offers and counter offers are made before the deal is sealed.
If the vendor does not feel that the price you have suggested is right, he will make a counter offer and suggest a figure that he feels is close to what you are offering to pay. It is not unheard of for sellers to reject an offer completely and walk away.
In most cases though, they are willing to negotiate so that you can come to a middle ground.
Sometimes you want to invest in a property not because you genuinely need it but because you have some extra money. For example, you could be looking to buy a second property because you have finished paying for your first one. In such a case, you can make a ridiculously low bid because it doesn’t matter if the seller walks away from the deal. It might be your lucky day, and you might find that he is naive or desperate enough to take your offer.
If you are really serious about buying the property though, make an offer close to what you expect to pay so that you don’t risk losing the property and also, so that you can tie up the deal quickly. Sometimes, when negotiations take too long, there is the risk of emotional attachment to the property so that you have a hard time walking away should you be required to. Sometimes this attachment can cause irrational decisions, like offering to pay more than you can afford. Don’t allow yourself to get into this kind of a situation. It is very important that you make a ceiling for how much you can spend and then make sure that you stick to it; ask your agent not to allow you to go past the ceiling.
In some cases, you will make a low offer not because you are not very serious but because you can see that the property is over-valued; it could be that it needs repairs done. Explain this to your agent so that they can present it in your counter offer to the seller. Because the seller is interested in closing a deal as soon as he can, he will accept your offer if he feels that he can accept what you are offering. Once he accepts, you will need to sign a contract saying that you have agreed to the purchase.
The seller prepares all the necessary contracts for you to sign. At this stage, though not legally required, you can hand over a holding deposit (it is usually a sign of good faith). You pay the rest of the money on settlement, but even then you are allowed vacant possession and you may find that the property is not in the same condition as it was when you were negotiating. It is within your right to withhold the rest of the settlement until the property is restored to its former condition.