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Buyers in the box seat as vendor discounts climb
Vendor positions have softened in recent months, and as the balance of power shifts to purchasers, one buyer’s agent warns vendors to keep their cards close to their chest or risk weakening their position.
As markets slow and fewer buyers come to market, vendors have been forced to accept lower prices to ensure they can settle.
Analysis of Cotality data by the Real Estate Buyers Agents Association of Australia (REBAA) found that home buyers may be in a stronger position than they realised, with vendors accepting larger discounts to secure a sale.
The analysis found vendor discounts of up to 14 per cent below asking price in some suburbs, creating a strong opportunity to act for prospective buyers.
Culburra Beach in NSW had the largest vendor discount in the nation, with sellers taking 14.1 per cent less to ensure the property sold.
Charters Towers City, Queensland, ranked second with a 12.8 per cent vendor discount and a median dwelling value of $344,521.
Daylesford in Victoria took out third with an 11.5 per cent vendor discount and a median price of $741,074.
Killara in Sydney ranked sixth nationally, with vendor discounts of 9.9 per cent and a median value of $2.74 million, meaning owners were willing to sell their property for more than $270,000 below value.
State performance
According to REBAA’s data, nine of the best suburbs for vendor discounts were in NSW, with Lalor Park, Kingswood, Glenhaven, Punchbowl, Potts Point, Darlinghurst and Moonee Beach all featuring in the top 20 nationally.
Queensland was the next most represented state, with vendors in Charters Towers City, Everton Park, Ashmore, Merrimac and Paradise Point accepting discounts of between 9-13 per cent.
Victorian suburbs Daylesford, Mambourin, Tootgarook, Blairgowrie saw the state the third most represented nationally, while Shoalwater, Western Australia and West Lakes, South Australia rounded out the top 20.
REBAA president Zoran Solano said the findings highlighted the importance of understanding local market movements rather than national data.
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“While national property prices may tell one story, conditions on the ground can vary significantly from suburb to suburb,” Solano said.
“The data shows that there are many markets where sellers are becoming increasingly negotiable, which is creating opportunities for buyers who do their research and enter the market well prepared.”
How to negotiate
Pinnacle Buyers Agents founder Michael Lezaja said that current market conditions had left buyers in the box seat for the first time since COVID-19.
“This is the first real advantage the buyer has had in many years,” Lezaja told SPI.
He said that while buyers may have held the position of power, they still had to be wary of seasoned agents with much more negotiation experience.
“Negotiation is an art form that is learned over many, many years, and it’s super difficult to teach someone how to talk to an agent who is negotiating on a daily basis,” Lezaja said.
“The biggest takeaway is to let them know that you are a qualified buyer so that they take you seriously, but at the same time, don’t show your whole hand.”
“If I’m sitting down for Texas Hold ’em and I could know what everyone else is holding without them knowing what I’m holding, I’m in the best position, and it’s the exact same in property negotiations.”
Lezaja said the biggest negotiation mistake he had seen was buyers revealing too much.
By giving away their maximum budget or how interested they were in a property, Lezaja said that buyers were softening their own bargaining position.
He said that buyers should try to gain as much information as possible while revealing as little as they can.
While vendors were accepting more significant discounts, Lezaja said it was important to remain respectful with the selling agent.
“It’s not just about lowballing or trying to offer 20 per cent below asking price.”
“Don’t be afraid to be a little bit cheeky, but do it in a way that is respectful and doesn’t put the agent offside.”
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