For most of us, buying or selling property is one of the biggest financial decisions we’ll ever make. That’s why getting the best possible price is so important — and often tricky. In this article, we’ll explore the ins and outs of property negotiation and why working with a professional real estate agent can make all the difference.
Understanding the process of negotiating an offer to purchase
Once a buyer finds a home they love, their agent will help them put together a formal offer. This includes:
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The offered purchase price
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Conditions/contingencies (e.g. financing, inspections)
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Preferred closing date
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Any inclusions/exclusions (like appliances or fixtures)
The offer is then submitted to the seller’s agent for review. The agent will then pass it on to the seller who will then consider the entire offer — not just the price. They’ll weigh up things like:
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Is the offer close to their asking price?
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Are the contingencies reasonable?
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Is the buyer pre-approved for home finance?
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Does the timeline suit them?
After reviewing, the seller can:
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Accept the offer as is (which makes it a binding agreement, once signed)
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Reject it completely
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Send a counteroffer, adjusting the price, terms, or dates
If a counteroffer is made, the negotiation continues. This stage can involve multiple rounds of back-and-forth, all mediated through the real estate agent. They act as a neutral third party who can negotiate on both sides to help find a middle ground that ultimately leads to the property being sold.
How can local property market conditions affect negotiations
Before embarking on any negotiations, both buyers and sellers should do some homework. Get to understand the current real estate market within your area. Research property prices, trends, and demand. Estate agents have a thorough understanding of local market conditions, which enables them to provide accurate price assessments and identify valuable opportunities. Even within the same city, neighbourhood trends can vary, so understanding local dynamics is key to negotiating effectively.
In a buyer’s market, where there are more homes than buyers, sellers are more open to price reductions and concessions. In a seller’s market, where demand outweighs supply, buyers often face bidding wars and may need to offer above asking price or waive conditions. In balanced markets, both sides tend to compromise.
Keep in mind that homes that are close to good schools, reliable public transport, or popular shopping areas are often in higher demand, and with higher demand comes higher value. Sellers are likely aware of the demand and may be less willing to budge. If you’re looking at a property in a quieter area, that could be a good point in your negotiation.
Know what you want and what you can afford
For buyers, knowing what you can spend and determining your budget is the foundation of any property negotiation. Calculate how much you can afford and be clear about your limits; if you need a home loan, ensure that you have pre-approved financing. Not only will this help to streamline your property search, but this way you will be able to negotiate confidently without overextending yourself. Understanding your own criteria for a new home will help you to identify and prioritise potential properties and give you a better understanding of a realistic, affordable price you can offer. Don’t forget to include all the costs in your budget, e.g. the deposit, transfer duties, lawyers’ fees and bond costs, to name just a few.
Likewise, sellers also need to determine the lowest offer they’re willing to accept. Calculate how much you need to walk away with after all the deductions are made, such as real estate agent commission and rates clearance certificates.
Getting to know the person behind the offer
Understanding the other party’s situation can give you a valuable edge during negotiations. As a seller, knowing if a buyer is under time pressure—perhaps relocating for work or needing to move quickly—might help you hold firm on price while offering a faster transfer date to sweeten the deal. On the other hand, as a buyer, learning that a seller has already bought another property or is relocating urgently could give you room to negotiate a lower price or better terms. In both cases, approaching negotiations with empathy and curiosity—not just numbers—can reveal opportunities to create a win-win outcome.
The Negotiation
When it gets to the negotiation stage, it is important to stay objective and don’t take anything personally. This is why it is so useful to work through your real estate agent and not be face-to-face with the other party.
1. The initial offer
For buyers, if you’ve found your dream home and don’t want to risk losing it to another buyer, consider offering the full asking price - if it’s within your budget to do so. Or start with a reasonable but slightly lower-than-asking price as your first offer. This way, you demonstrate your interest but still have wiggle room for further negotiation. But, as long as you don’t mind losing out on the home, then you can afford to be slightly more aggressive with your initial offer.
For sellers, if you are in a rush to sell, then consider each offer carefully before rejecting any. Even if an offer is ridiculously low, you could go back with a counter offer and the buyer could surprise you by rising to meet that counter offer. If you are not in a rush to sell or if there is high demand in your area, then you can afford to be slightly more picky in which offers you are willing to entertain.
2. The counter-offers
When you are in the back-and-forth stage of negotiations, it is important to be prepared to justify your offer with facts, like with comparable sales data – your agent will help with this – and any issues you have identified with the property like inspection reports, to strengthen your position.
3. Learn patience and flexibility
Successful negotiations can take time, which means that as anxious as you might be to finalise the transaction, you may well have to be both patient and flexible as you consider and/or present counteroffers. Word to the wise: There may come a time when you have to walk away: the transaction just won’t work if neither party is able to budge on their position.
Closing the deal
Once you have agreed to a price, ensure that all the terms and any special conditions are clearly recorded in the offer to purchase. If you are anxious about anything in the contract, you are well within your rights to get independent professional and legal advice. Remember that a well-drafted agreement protects everyone, ensuring a smooth transaction. Whether you are buying or selling, reach out to your local RE/MAX office for professional help and support.
Have more unanswered questions? Here are some related questions – and answers – that might help…
What is the lowest offer a buyer can make?
While there is no regulation or hard rule about this, it’s generally understood that anything lower than around 10% of the asking price is a really cheeky offer. This will, of course, depend on prevailing market conditions and what the seller wants. Allow your estate agent to guide you.
How to negotiate on price when it's a private sale?
A private sale is one where the buyer works directly with the seller. We do not recommend this route not only because of the technicalities involved in property transactions, but also because the majority of buyers and sellers are often too personally invested in the deal to be objective. This can lead to conflict. However, when a sale is facilitated by an estate agent, the seller and buyer rarely, sometimes never, actually meet, which cuts out the potential for clashes.
