Greg came to us buying under the Government’s Help to Buy Scheme, which meant we were working to a firm ceiling. There was a maximum purchase price we had to stay under, and every decision had to respect that cap.
We found the property in the first week of searching. After the first round of inspections, Greg really liked it, but liking a property isn’t a reason to overpay for it. We wanted to protect the budget, so we opened with an offer that was a fair bit below the price guide.
We put the offer in early, right at the start of the campaign, knowing the vendor would likely want to see a few more inspections before entertaining a lower number. We arrived at the figure by reading the situation. Competition was limited at the time, and the property had a tenant in place. That wasn’t an issue for Greg as he had an existing lease of his own, so the timing actually worked for him.
The offer was rejected, with no counter. That told us where the vendor’s head was, but it didn’t change our number. We weren’t going to negotiate against ourselves. We left the offer on the table and continued the search while keeping in regular contact with the agent.
Over the next two weeks, we looked at other properties and kept an eye on what was happening with this one. Nothing else measured up and eventually the vendor and agent were ready to talk.
The negotiation ran for well over a week, with another buyer in the mix. We worked it through to our purchase price and then left it with the vendor to sit on for a few days.
This was the real test. The vendor’s expectations were anchored to a comparable sale in the same building, which was a two-bedroom unit with only one car space that had sold for $825,000 the month before. That was the number the agent was working from.
We didn’t rush it, and we didn’t chase the comparable.
In the end, Greg secured his unit with an extra car space for $35,000 less than the unit had sold for the month before.