Which price is fair when buying real estate? This question is not easy to answer. As a buyer, it definitely gives you a good feeling if the price was negotiated in your own favor.
Buying real estate in Germany for a very cheap price isn't working anymore for already a long time. The price regulates itself by supply and demand. This applies worldwide. In many German regions the demand for residential property is higher than the supply. That drives the prices. It is not uncommon for real estate to be sold at a higher price than it was actually called for. After all, buying a property is also a lot about emotions.
I've seen our team accompany or guide thousands of buyers in winning offers.From these experiences, I have summarised ten tips for price negotiation for you.
Check how long the property has been listed online.
Search google for multiple listings on different websites. You can use the image search for that.
The shorter the listing has been online, the harder it will be to negotiate. Generally, if the property is just listed on the market, the seller will be less willing to reduce the price. There may be someone who’s willing to pay the full amount.
Understand the politics: is it a private seller, is it a real estate broker? If so, are there several estate agents offering the same property? Maybe you can find it somewhere else at a lower price.
Psychology is important: understand the incentives, is the seller selling to make a profit, to buy their next home, what’s their goal?
Real estate agents usually try to give you a vague feedback: "There are a few interested parties" - be specific and ask quietly if there are already bids and at what price. You can also ask if the owner is considering the previous bids or at what price he would be willing to sell. Try to get the estate agent to tell you more about the seller and his personality - use this information to your advantage.
When making an offer, write it in German, our team has templates we use for this. Reach out to them.
Move quickly, make sure you have a financing certificate or a reputable mortgage expert call to confirm your eligibility and set expectations for timeline. Contact one of our mortgage experts if you need a financing certificate.
Sellers sometimes care more about security and speed than price - figure out the sweet spot.
Pro-tip: use a property valuation tool to check the property. If the price deviates hard, you can try to use this to negotiate. But be smart, how quickly is the real estate broker responding? Fast? Is he desperate? Or can he barely get through all the expose requests?
The purchase of real estate is still a people business. Use data to inform yourself about your decisions and try to use them to your advantage. When buying real estate, emotions also play a major role. Once prospective buyers have found their dream property, they are often willing to pay more than it is actually worth. In a tight market with a high demand, price negotiations are more and more difficult, because often a buyer can be found who will pay the full purchase price or even more.
I wish you the best of luck in finding your future home!