Please note that with a current shortage of residential land across many areas of Australia your negotiating power may be limited. In some cases, attempting to negotiate using these strategies could see you missing out on your choice block given that land is in such high demand. For example, at the time of writing this, in some areas of regional Victoria land is being snapped up two years or more prior to when tiles are expected to be issued. In these circumstances people are paying the asking price for the land regardless, for fear of missing out.
In saying this, I still encourage you to read this as things move so fast in the property market that you may find these tips useful some time in your future, if not now.
Insider secrets to negotiating a block anywhere in Australia
Insider secrets to negotiating a block of land anywhere in Australia
True historic records
What properties are listed for and what properties often end up selling for can be two different things. It’s the 'sold' price of surrounding properties that hold the secrets to your negotiating power.
Assessing supply v’s demand
One of the most significant drivers of price is supply v’s demand. The current market supply that exists across an entire area can be used for or against you when it comes to negotiation. Do your homework on the available lots in the town or suburb you’re looking in.
Motivation to sell
Have you ever heard the term ‘the vendor is motivated to sell’? Property Development is not always ‘beer and skittles’. Land is no different to any other product that is for sale. There are times where they’ll hold and times where they’ll fold. Ideally, you’ll want to gain insights into the land owners’ motivation (or lack of) to sell.
Developers can’t always promote what they’d be willing to accept. If a developer has sold 78 blocks in an estate for x amount of dollars and want to get rid of the last remaining 5 blocks, they are very limited by how they might promote that offer. If they have a fire-sale at say 10% off, they are going to have 78 very angry customers who months before may have paid full price for their block of land. Again, the key is to get the scoop on a land owner’s motivation to sell. You just never know where those great little opportunities might be lurking.
Skip the agent
What if in some cases you could skip the agent and deal directly with the land owner?
In some instances, you may be able to purchase the block directly from the owner themselves. It’s not always easy getting to the right people, but if you can, and they’re willing, you might just be able to save the agents commission value off your block at the very least.
Odd shaped blocks, sloping blocks, blocks with easements or covenants… These can be tricky for volume builders to navigate, however these types of blocks can hold huge potential for a custom built home where you can use the perceived limitations of the block to your advantage. Consider some of the most spectacular homes you’ve seen. They’re usually on sloping blocks.
You have a far better chance of negotiating the price of a block if you can justify your offer. Doing your homework and knowing the market gives you the upper hand.
Buying property can be a daunting experience and not everyone feels comfortable negotiating property. A land buying advocate is trained to understand the psychology of the buyer and the seller. They use these insights to get the best possible outcome for you.
Get creative when approaching your negotiations. You may be able to snag a great deal by applying any of our insider tips.
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