Buying

Price negotiation when buying a house

As a homebuyer, there is practically no way around price negotiations. You may increase your chances of buying by arguing sensibly and comprehensibly. The optimal mix of sovereignty, goodwill, but also steadfastness is most likely to lead to success. In short, you need to demonstrate negotiating skills.

15.12.20213min3min

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Roland Altwegg via Raiffeisen Casa

Head of New Business Models & Ecosystems, Raiffeisen Switzerland

Negotiation

The price advertised in the ad with the addition "as a basis for negotiation" is attractive. For sale is a semi-detached house in the countryside, close to the city and with optimal transport links. Now it starts: The seller does not seem to sell without intensive price negotiations. Several applicants are interested - at least that's what he says.

Prospective buyers should now keep a clear head and neither put themselves under pressure nor let themselves be stalled for too long. What is needed is a clever strategy for conducting the inevitable price negotiations and, if possible, bringing them to a successful conclusion.

Understand the price first before negotiating

Especially when negotiating the price of a house purchase, it is helpful to be clear about the composition of the advertised price as a first step. "A sales price is usually made up of several parameters," says Roland Altwegg of Raiffeisen Switzerland. The hedonic estimate, i.e. a statistical comparative value method that defines a certain price range, serves as a basis, he says. "However, it is then important to underpin this method with further facts and key figures and thereby narrow down the price further." To this end, the square meter prices and sales prices of properties in the immediate vicinity are taken into account, as are current market trends and the relationship between supply and demand. "An outside appraisal by an accredited expert can also do a good job of determining a property's market value. It is also more detailed than a hedonic appraisal," Altwegg says. Speculative and fancier prices are also advertised from time to time. But these are not sustainable and are not backed up by facts, he warns buyers.

Value retention as an investment argument

The most important sticking points in price negotiations are usually the investments that the buyer has to make in order to restore the property. "Here it is very important that these investments are objectively justified by the buyer, as they serve to maintain the value," says Roland Altwegg. Less convincing in this debate are arguments based on personal preferences. These cannot be taken into account in a price negotiation. He advises every buyer to always negotiate with arguments that are comprehensible to the other party and fair from an objective point of view. Because one thing is clear: "With unrealistic price ideas and subjective arguments, you have poor chances of actually living in your dream house in the countryside with city proximity one day."

8 tips for price negotiation

  1. Establish a clear strategy and objective.

  2. Be fair to the negotiating partner.

  3. Also put yourself in your counterpart's shoes.

  4. Argue factually and be authoritative.

  5. Be open and willing to make certain compromises. Nevertheless, be firm in your approach.

  6. React calmly and confidently.

  7. Show perseverance and do not give in immediately.

  8. Support your asking price with expert opinions/bank appraisals.

Raiffeisen Casa

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