Mozo guides

Home buying negotiation tips

A home buyer negotiates with a seller.

Home loan costs ultimately boil down to one thing: property price. The property price decides everything from your deposit size to your home loan amount, so negotiating a fair market value is key to your home buying experience.

Negotiation can be daunting, too. High home values mean a lot of money is on the table, and if you’re negotiating your dream home, the task can be emotional. But it pays to keep your cool in today’s hot property market. 

Here are the essential negotiating tips buyers need to know.

Tip 1: Negotiation is for every type of property buyer

Every type of home buyer

Anyone can negotiate a purchase price – first home buyers, investors, and downsizers alike. If this is your first time buying a home, banish that imposter syndrome. If this is your tenth time buying a home, you’ll still need to do your research. 

Negotiation is about staying calm, informed, and firm, and these traits can be embodied by anyone, no matter their experience.

Tip 2: Why do you want the property?

Buyer intent

Different buyers value different things. Use your aims for the property to your advantage, and remember emotional value is not the same thing as actual value.

For example, first home buyers might have a leg up on family homes, especially if the seller is sentimental and wants to sell to someone who will love the place as much as they did. Just keep your perspective on the property clear. 

Property investors looking for a rental space might value tenant potential, so they can negotiate from that position. Someone who wants to knock down a property just needs to worry about the land value.

Tip 3: Do your research

Do your research

Information is power in negotiation. Before negotiating a property price, you need to know:

  • The history and condition of the property.
  • The values and sales trends in the surrounding suburb.
  • The housing market as a whole.

Timing is everything. If it’s a seller’s market, then the seller has more negotiating power because there are more buyers competing for a limited number of properties. If it’s a buyer’s market, then you have more power because you could simply take your business elsewhere.

Knowing the market also means you can ask probing questions. How did the seller arrive at their asking price? Are there comparable properties in the area? And since you’ve done your research, you don’t have to rely on them for the correct answer.

Tip 4: Have a solicitor or conveyancer in your corner

Solicitor or conveyancer

A solicitor or conveyancer is a useful expert to hire for the home buying process. Their primary role is to help prepare, exchange, and sign contracts of sale, but they can also help negotiate property prices by acting as a professional go-between for you and the seller. 

You could also use a real estate agent instead of a solicitor during the negotiation. Realtors will be deeply familiar with the surrounding area and have experience negotiating fair prices.

Before hiring a real estate agent, ask them about any professional affiliations and how they receive commissions. You want someone in your corner, after all – not their own.

Tip 5: Clear, polite communication

Clear, polite communication

Politeness doesn’t mean pushover. Clear, polite communication is about setting expectations, asking questions, and respecting the person you’re dealing with.

Instead of writing:

“I’m not paying top dollar for this rubbish heap!”


“I’m really interested in the property. I can see it’s in good condition but needs some work here and there. Is the owner prepared to come down a little in price?”

This sets the tone for the negotiation and lets the seller know you’re serious about the property.

Tip 6: It’s not you vs. the seller

Have a good negotiation mindset

Many, if not most, sellers are willing to work with buyers to reach a price that works for everyone. Instead of approaching property negotiations in a “me versus you” mindset, approach them with an “us versus the problem” attitude. 

The former antagonises the seller and distances negotiations; the latter is collaborative and brings everyone together. 

Buyers and sellers want the same thing: the best and fairest price of the property. An “us versus the problem” attitude helps you stand out from other buyers and shows you’re willing to work with the seller to reach a price that works for all parties.

Tip 7: Inspect the property

Inspect the property

If you’re serious about buying the property, inspect it. Top to bottom. This includes:

  • Pest inspections to check the condition.
  • Property inspections so you can get a feel for it.
  • Property valuations so you have a conservative and legally binding appraisal of the home’s market value. 

Consider home insurance risks in your inspection, too. How high is the property above sea level? What’s your flood and bushfire risk? This is all essential information to know for any property negotiation.

Tip 8: Don’t bargain down too much

Bargain down wisely

As a general rule of thumb, don’t bargain below 30% of the asking price. You want your bid to stay competitive with other buyers, so talk with your solicitor, do your research, and come up with a number that’s reasonable. 

Try 10% to 20% below the asking price for good condition properties. For properties that need a lot of maintenance or have insurance risks, you can underbid by more.

Aim for the sweet spot between what you want in a perfect world and the seller’s asking price. You want a bid that’s enticing enough for the seller to send you a counteroffer (or, better still, accept it) but not so high you have no wiggle room. 

If you get them talking to you, that’s good. You can incrementally raise your offer from there.

Tip 9: Know your borrowing power

Know your borrowing power

You’ll need to know how much you can afford to spend on the property to negotiate. Do your research, start saving, and talk to your home loan lender. How much can you afford to borrow? This number is called your borrowing power

Your borrowing power is the maximum amount you can spend on the property. Do not bid more than your borrowing power. If the final purchase price exceeds your borrowing power, the lender may reject your home loan application, which means you could lose the property and forfeit some or all of your home loan deposit. 

Not sure what you can afford? Mozo’s free borrowing power calculator makes this easy to estimate. Try our other home loan calculators below.

Tip 10: Mind your business

Mind your business

The seller is not entitled to know your budget, circumstances, or even plans for the property if you don’t want to tell them. Instead, mind your business (i.e. only worry about what you can control). This keeps the negotiation process impersonal and professional. 

Also, don’t reveal your cards. Even if you can afford to spend $1.5 million, the seller is not entitled to know this. It is not their business. Negotiate what you think is fair based on the property and market.

Tip 11: Be prepared to walk away

Be prepared to walk away

It can be tricky to walk away from the negotiation table. Property grief is a real sensation experienced by many buyers, especially if they lose out on their dream home. However, the ability to walk away is essential to any negotiation. 

For starters, heartbreak is better than bankruptcy. If the seller isn’t cooperating or asks too much, step back and let the property go. 

Secondly, walking away is a powerful negotiation tactic. It tips the balance of power back in your favour and makes the seller think twice – especially if the seller is desperate. (Off-market sellers typically want to get things done in a hurry). 

Finally, walking away moves you to better opportunities faster. No sense in wasting time on something that isn’t gonna happen! The Australian property market is vast and ever-changing. Something better might be right around the corner.

Compare home loans in the table below.

Evlin DuBose
Evlin DuBose
Senior Money Writer

Evlin is RG146 certified for Generic Knowledge and has become a leading voice in finance news since joining Mozo two years ago. She is regularly featured in Google's Top Stories alongside major publications like and Yahoo Finance, and seasoned journalists. Despite being in the industry for just two years, she is Mozo's go-to writer for all things RBA and her research has been referenced by the Victorian Government. With a Bachelor of Communications degree from UTS, where she won the Dean's Merit Award and acted as the Director of Student Publications.

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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