Mastering Property Negotiation: Winning Strategies for Hot & Cold Markets

Property negotiations can be the key to securing a great real estate deal—or missing out entirely. Your success depends on recognising whether you're in a hot or cold market and adjusting your strategy accordingly.

🔹 Cold Market Advantage: With properties sitting for 30-90 days, you gain leverage. Start with lower offers, negotiate patiently, and include favourable finance and settlement terms. These markets often allow buyers to secure properties below the asking price.

🔹 Hot Market Reality: When properties sell within 10-15 days and open homes attract 30+ buyers, hesitation can cost you $50,000+. You need fast, strategic offers, short settlements, and minimal conditions to stay ahead.

The biggest mistake? Failing to adapt to market conditions. A small negotiation delay in a rising market could mean paying significantly more later.

🎧 Want to master property deals? Subscribe to the Taylored Property Wealth Podcast for expert strategies that can save you thousands!

Chapters

• 0:00 Introduction to Property Negotiations
• 2:15 Common Negotiation Mistakes to Avoid
• 3:49 Identifying Hot vs Cold Markets
• 6:51 Cold Market Negotiation Strategies
• 8:48 Hot Market Negotiation Tactics
• 12:43 Negotiation Art and Final Advice

Transcript

Speaker 1: 0:00

Welcome back to another episode of the Taylor Property Wealth Podcast. My name is Casey Taylor and in today's episode, we're going to be talking about property negotiations in a hot market versus a cold market, and, depending upon whether it's a hot market or a cold market, there are different strategies you need to implement to be able to successfully negotiate, secure property and get it for a good result. So we'll dive straight into, I guess, what we're going to be going over today. Now. I guess I just want to touch on some of the mistakes, first of all, that I see people make when they're going out there and negotiating themselves, and this is where it's really key to have property specific negotiation skills, and it's not just because I negotiate in my sales role or whatever that is. It's very different with property and there's a there's a number of things that you want to consider, and it's still reliant on data, because understanding the data is understanding how you're going to negotiate. And too many times I see people, or hear people, or know people who are out there searching for property and it takes them six months to buy something because they're doing it themselves and they're not adapting to the market and the environment that they're in, so that can cost them massively, because if you go out there and use a professional, they're going to do it much more efficiently and quicker versus if you're waiting 12 months and prices rise 100K.

Speaker 1: 1:36

Yes, you ultimately buy. You're buying the marketplace you want, but you're buying and paying far more for what you could have purchased 12 months ago. Not to mention if you're for paying far more for what you could have purchased 12 months ago. Not to mention if you're, for example, owner occupied. You want to move into that property if you made that decision as soon as you can. So it is just really important not to make the mistakes. Don't be stubborn if it's a super hot market and say, no, I'm not paying that five to ten k extra. Because if it's a super hot market and say no, I'm not paying that $5,000 to $10,000 extra. Because if it's a hot market and you take three to six months longer, prices might rise another $50,000 before you purchase. So you might as well put in that tiny bit extra now, secure the property and move on. Otherwise someone else will, and if you factor $5,000 or $10,000 over 30 years with your interest rate, you're not going to notice much difference. Now, another thing is that I see people making mistakes is they take too long to make a decision If that property is in a hot market. You in some instances instances have hours, not days, hours, and I say that to clients sometimes, and sometimes they have to learn that hard way how quickly a decision needs to be made. So understand that. Are you in a cold market or a hot market? Others don't understand that just because an agent has listed it for a certain price does not mean that that's where the property price will ultimately fall and where market value is. Agents strategically put list prices well below where they're going to sit because that generates more inquiry, it creates FOMO and it's building their database, with more people coming to the open home and checking out the property. They capture a mobile email address and now they've got someone who they can reach out to. So they're some of the big mistakes we see people make.

Speaker 1: 3:35

Let's get into, I guess, just roughly what a cold market versus a hot market looks like and then we're going to go through some of those I guess strategies you wanna implement for each to be successful. So in a cold market, you're going to have high median days on market because not as many properties are selling. There's not as many buyers. It's not moving as quickly. So you could potentially see median days on market sit between 30 to 60, 60 to 90 days and that's, on average, how quickly properties are selling. So that's a good indication of potentially how much time you've got up your sleeve to be able to make offers. Does it have a high vendor discount and what that means is on that original list price that I just mentioned prior. In a hot market that's going to jump up higher. In a cold market, vendors might be discounting because it's not hitting that list price. So if you can understand that percentage, it's understanding if it's a hot or cold market. It's understanding if it's a hot or cold market.

Speaker 1: 4:39

Properties selling under the list price is really key just to see if it's hot, if it's not and that demand in an area. So that's something important to take a look at. And when you're going to open homes, look around how many other buyers are here Is there 20 to 30 or is there only a couple? And always try and hear the conversations that the buyers are having with the agent if you can, because that's understanding their, I guess, commitment to the property as well. In a hot market there's going to be low median days on market very low. That means that they're selling pretty much in the first open home. We have median days on market in some of the suburbs that we're touching in that kind of 10 to 15 day mark, selling extremely quickly. They have extremely low vendor discount and in a hot market, yes, you can still have a vendor discount because some vendors we see get greedy and they want to list a really big premium. But the market talks and it adjusts to where market value is. Properties are selling well over the list price. They could be selling 10, 20, 30, 40, 50k over, if not more.

Speaker 1: 5:54

We see that in some of the areas we've been targeting in the last 12 months it's got a strong local economy. The things are pumping, there's a lot going on and that's why people are out buying property as well. And if you look around and you're going through, you'll notice that there's 10, 20, 30 groups, some of these properties in these hot markets. So if you're going to go in with a really crappy offer, you've got 29 other buyers there potentially that are happy to pay what the vendor wants. So there's some really key things that you want to understand before you are making an offer before you're attending properties. So it's important to go and look at the data. It's important to go and analyse real life when you're at properties, what everything looks like as well, because that data is lagged.

Speaker 1: 6:46

So if we're in a cold market, what are the strategies you want to implement Now? Because it's at that cold market? It could be that 30 to 60 days, 60 to 90, like I said, you have time to negotiate so you can strategically go in with your offer and with your terms, understanding that this isn't your best offer. You know before you even begin negotiations where your best offer is and where you want to get to ultimately. But you might have the option to go in 50k under where you are happy to move to because you have time to negotiate. You have time for the vendor to come back and to counter. This is all something you need to understand. As for that property, and you need to do your comparable market analysts of properties in the area and understand where the value is so that you can adequately go in there and make your offer. You're in a position as well where you can put in a 21 to 30 day finance clause because you've got time, because there's not as much demand and you might have the option to put in longer settlement as well that suits you. Potentially it might be 60 days, it might be 60 days, it might be 90 days, it could even be longer if you need to prepare where you're currently at, to move and whatever else. Those, those settlements can vary, but you can't get away with some of that stuff in a hot market when there's so many other buyers and we'll get to that in a moment. Just really really understand that cold market and the flexibility that you have in that market versus the hot market, which we'll talk about now.

Speaker 1: 8:24

Now, the hot market, you do not have time to negotiate. Your mindset needs to be I'm structuring two offers One offer, the first that's my first offer and then understanding that the vendor will counter and then you're going to come back with that offer. That is your final offer and hopefully gets that deal done and hopefully gets that deal done. And you do not have days, you do not have weeks to make a decision. It can be hours If you wanna secure it, if it's just gone online and you wanna secure it before Saturday to eliminate competition. You have hours, potentially maybe slightly days if it's early in the week, but as soon as it goes closer to Saturday, vendors are gonna wanna want to take that to the open. So move quickly. You don't have time to think about it. You cannot delay now.

Speaker 1: 9:16

As I mentioned, you want to go in there strategically with your first offer, understanding that the vendor is going to counter, and then you move in with your final offer and hopefully that's where you get the deal done. So you might be putting forward your offer, let's say 10 to 20k under where you get the deal done. So you might be putting forward your offer, let's say 10 to 20K under where you're prepared to pay, because then you can counter, increase 10 or 15, 20, and then land where you need to land. And this is where you want to have short terms, short finance, short pest and building and short settlement, because we want the vendor to have confidence in the deal. So if finance and pest and building is satisfied quickly, then they know it's locked in, it's 100%. We just need to move through the settlement. And that's where securing before auction you can have those terms and make sure that that property is going to be unconditional prior to the auction taking place, because that gives your vendor the confidence that it's going to be locked up and that's how we secure prior to auction we put in really strong terms that are due prior to that auction taking place.

Speaker 1: 10:23

In short, settlement period. Settlement for the agent and for the vendor means they get paid. So if there's 30 people out there, you have to understand the motive. For the agent and for the vendor means they get paid. So if there's 30 people out there, you have to understand the motive of the agent and the vendor and they're going to ultimately want to get paid as quickly as possible. Most of the time, sometimes even in a hot market, a vendor might want a longer settlement because of their individual situation. But for the most part, quicker is going to be better. But there's always always subject to personal circumstances. So you need to go in, you need to act quickly, have really strong terms. Only count once.

Speaker 1: 10:57

There's not none of this back and forth and weeks of negotiation it could be boom first open, taking all offers, take it to the vendor and then get it done. There won't be multiple weekends, there won't be weeks for you to sit there and decide whether this is the property for you or not. You need to be able to have a structured system in place to determine is this the property for me or not, and be able to execute and make that decision very quickly. Negotiation is a delicate art because you need to make sure everyone is winning. You want to win as a purchaser, but you need to make the agent feel like they're winning and you need to make sure the vendor feels like they're winning as well. To keep all parties happy and to get a deal done, you want to put your offer in writing as well. It's not just like a verbal offer off the cuff. Have that structured offer and send it through and make sure it's in writing. If you've put forward a formal offer in writing, they need to present that to the owner. I have agents come back and say they will only present it on a contract. We've sent through a formal offer in writing. It needs to be presented. So make sure it's always structured when you're going forward and you're negotiating.

Speaker 1: 12:15

It can be the difference between getting a property and not. It can be the difference between getting a property under market value and not, or it could be the difference between you purchasing a property now or it taking six to 12 months longer because you're not adjusting to the market and your negotiations are not where they need to be to successfully purchase property. This is so crucial when purchasing because when you're purchasing, you're wanting to save money. But if you're taking far longer and it's taking you six to 12 months to find a property because your negotiation skills aren't there that is going to cost you money. If it jumps 100k and you're borrowing at 80%, you now have to pay $80,000 extra off over a 30-year loan and that hurts. That's it for now for the hot versus cold marketplace. Understand them, understand where the property is that you're negotiating on, so that you can set yourself up for success and get the best outcome for yourself when negotiating. Hope this one's of value and have a great week. Bye.