The process of buying a home in Canada’s real estate market can be gruelling, and homebuyers find themselves submitting offers on multiple properties without success. The process isn’t over once your offer has been accepted, however. Now is the time to negotiate the best house purchase price possible. This process requires plenty of back and forth between the buyer and the seller. Naturally, each party in this transaction wants to land the best house prices in Canada, so the negotiation process puts them at odds.

Then again, buying a home is one of the most significant purchases you’ll make in your lifetime. For this reason, it’s essential to negotiate shrewdly and secure the best deal possible by leveraging the expertise of professionals and using smart negotiation strategies.

Fortunately, you aren’t in it alone. During the negotiation phase, you’ll be able to rely on a real estate agent not only to advise you on reasonable negotiation tactics but also to act on your behalf. You won’t have to meet with the seller directly or justify your requests. Your real estate agent is there for you.

Why Negotiate Your Home’s Purchase Price

Negotiation might seem stressful, and you may be tempted to take the more straightforward path and avoid negotiating altogether, but this is a mistake. The process of negotiating all aspects of your home purchase has many benefits, including:

• Saving money: Save thousands on the purchase price of your home, resulting in lower mortgage payments, and more money in your monthly budget.
• Closing dates that work with your schedule: Negotiating a closing date that works with your schedule will result in less stress overall because you won’t be rushing to finalize closing paperwork, nor will you be in limbo for months.
• Keep essential conditions: Maintaining necessary conditions like financing or a home inspection could save you from the potential stress of struggling to find a lender or managing unexpected home repairs.

Set Yourself Up for Negotiating Success

Consider a negotiation as a dance between the buyer and the seller. While the dance’s ultimate goal is to close a transaction, it isn’t as straightforward as that. Just like a dance, there are many steps and multiple moves; each person (and side) can feel a myriad of emotions and, if not dealt with, the stress of it all can threaten to derail the process.

Of course, as a buyer, you’ll want to purchase at the lowest possible price, and sellers want to close deals at the highest possible price — but if you take the following steps to set yourself up for success, there’s a good chance both of you will walk away happy.

Consider Market Conditions

Depending on the market, either the buyer or the seller can have the upper hand at any given point. For example, in a buyer’s market, where there are more houses are available for sale than buyers, giving the buyer all the power. The buyer can easily walk away at any time and move on to the next property. If you’re in this situation, you have the control in the negotiation process, and your actions should reflect that.

In contrast, a seller’s market (where there is limited housing supply and buyers compete against each other) gives the advantage to the seller. The seller can take their time choosing from multiple offers and dictate the terms of a sale. The more in-demand the property is, the more power the seller has in controlling the negotiations. 

While getting the lowest possible price is essential, you’ll also have to keep in mind that in some of Canada’s hottest housing markets, you may not have much room to negotiate your home’s purchase price. In areas where buyers compete in bidding wars or multiple offer scenarios, your ability to negotiate is limited.

While you still may be able to negotiate after your initial offer is accepted, the seller will have the leverage of knowing that other buyers are willing to make offers. Your real estate agent can help you determine if you are in a buyer’s or seller’s market.

Use a Real Estate Agent

Hiring an expert real estate agent is the key to negotiating the best house prices in Canada. While some buyers and sellers mistakenly think that they can save money by handling the transaction on their own, the benefits of hiring an experienced real estate agent far outweigh any potential savings. For starters, agents have years of experience negotiating lower prices for buyers. In addition, you’ll want to use their technical expertise in making sure you get the best possible deal.

If you’re a novice at negotiation or don’t have any experience with it, it’s better to hire a professional. You don’t want to risk a scenario in which mistakes are made, such as appearing too eager, not having the necessary information required for bargaining, or saying yes to mediocre counteroffers. A professional real estate agent will have the negotiation skills that you need to help you avoid this. 

It also pays to have an unemotional third party on your side that can give you sensible advice on how to proceed. Since they aren’t attached to the property itself, they’ll be able to differentiate a good offer from a bad one. They can gauge how high or low each party can push, and with their years of experience, they know what manoeuvres to conduct for a successful deal.

Do Your Homework

It’s essential to perform due diligence and arm yourself with the necessary knowledge to negotiate the best house price. You can do this by finding data on recent selling prices for homes in your neighbourhood.

Researching the house prices within the area gives you a good idea of how much a given property is worth. Pay special attention to the costs of recently sold houses, too, because in a seller’s market, homes may have a lower list price and may sell for tens of thousands over the listing price.

If you’re wondering where to find data on house prices in Canada, your first stop should be your real estate agent. Real estate agents have access to data from your local real estate market. They can share this data with you, and together, you can decide how much your desired house is worth and how low you can haggle without causing the seller to reject your offer outright. There are also several websites that publish this data, and they vary by province.

Some buyers take their competitive research to the next level by getting to know the person they’ll be negotiating with. Understanding their motivations and how badly they want to sell gives you the advantage of drafting the right offer and counteroffer.

Finally, research the actual property itself. Ask your real estate agent to find out as much information about the property as possible, including:

• Whether it has been sold recently and for how much
• Whether any changes have been made
• How long it has been on the market
• Whether there have been any other offers that fell through, and why
• Whether there have been any price reductions

Knowing these facts ahead of time allows you to formulate a better strategy for negotiating the property’s price.

Manage Your Attitude

Staying aloof is easier said than done, especially in the high-pressure environment of a seller’s market. Still, maintaining a calm and collected attitude could mean the difference between a successful negotiation and overpaying for your home. In addition, you should try to conceal from the seller how badly you want the property.

3 Negotiation Strategies for Buyers

Buyers want one thing at the end of every negotiation: the best price at the best terms. After you’ve submitted your offer to the seller, they will return their counteroffer and you are now in the negotiation process. Here are some strategies you can use to help negotiate the best house prices in Canada.

Focus on More than the Purchase Price

Negotiating is about more than just the purchase price, so don’t focus solely on the price when submitting your counteroffer. Focusing on the price will limit your options and may even cause you to overlook a good opportunity.

Instead, you should adopt a micro-perspective of the transaction and see what exactly you can get out of it. Look at the value the house gives you and negotiate accordingly. Ask yourself these questions: 

• Is the house in need of any repairs?
• Will you be doing a complete renovation?
• Has the property been sitting on the market for a long time?
• How eager is the seller to close this deal?

These nuggets of information help you bargain and acquire the house at the best possible price. For example, if the seller counteroffers at a far higher price than you think the home is worth, you can counteroffer at a lower price. To convince the buyer your lower offer is reasonable,  you can highlight the drawbacks of the property. Leveraging these extra details can help you justify a lower purchase price to the seller.

Be Flexible on Terms and Conditions

Counteroffers are about more than just the purchase price, they also include various terms and conditions, and you can use these to leverage the best purchase price. Some standard terms and conditions include:

• Financing condition
• Home inspection condition
• Sale of existing home
• Closing date
• Credits for pressing repairs

It’s common for the seller to remove conditions when negotiating house prices in Canada. To prepare for this, divide all of your terms and conditions into the must-haves and nice-to-haves. Consider which conditions you can drop in advance to help you make decisions in a short timeframe.

Insist on a Home Inspection

You can waive some terms and conditions during negotiations, but a home inspection is a must-have because it can save you money on the purchase price. A home inspection gives you a more intimate look at the house you’re planning to buy. A home inspector will evaluate the home and look for issues from cracks in the foundation to non-code compliant handrails. If the house has any significant problems, you can use this information as negotiation leverage.

For example, you find out that the roof leaks on rainy days. Roof repairs are costly, so you can negotiate a lower asking price to compensate.

Final Thoughts

Negotiating the best house prices in Canada can be stressful. The process puts you at odds with the seller. You’re interested in getting the lowest possible price, and they desire the complete opposite. This opposition can cause significant stress, but with plenty of preparation, due diligence, and a competent real estate agent, you can use the strategies above to secure the best possible purchase price for your home.