How much can you really negotiate on a property?

Finding a home you love is one thing. Deciding what to offer for it can be much harder. Should you offer the asking price? Start 5% lower? Try 10% and see what happens? And if a property has been sitting on the market for months, does that automatically mean the seller will accept a substantially lower price?

There is no standard discount that buyers should expect when purchasing a property. Your negotiating power depends on the property you are buying, how accurately it has been priced, the level of competition from other buyers, and what is happening in that particular local market.

Understanding those factors can help you make an offer that protects your budget without unnecessarily costing you the property.

Start with the asking price, but don't assume it is the property's value

One of the biggest mistakes buyers can make is treating the asking price as either a fixed price or an invitation to negotiate. It is neither.

The asking price is what the seller hopes to achieve. Whether it accurately reflects the property's market value depends on recent comparable sales, current competition, and demand for homes like it.

A home listed at R2 million that is realistically worth around R2 million may offer considerably less negotiating room than a home listed at R2 million when comparable properties have recently sold closer to R1.8 million.

That is why deciding what to offer should start with value rather than with an arbitrary percentage off the asking price.

Look at how long the property has been on the market

Time on market can provide an important clue about a seller's negotiating position. A property that has only recently been listed and is attracting plenty of interest may leave buyers with relatively little room to negotiate.

If several buyers are interested, an aggressive low offer could simply give somebody else the opportunity to secure the property. The picture can be very different when a home has been listed for an extended period.

A seller who has been waiting months for a suitable offer may be more willing to negotiate, particularly if they need to relocate, have already purchased another home, or simply want to move the transaction forward. But a long listing period does not automatically mean the seller is desperate. It could also mean that the seller is unwilling to move significantly on price.

This is where the estate agent can provide valuable context.

Find out whether you are competing with other buyers

Negotiation changes very quickly when another buyer enters the picture.

When demand for a particular property is strong, sellers have less reason to accept a discounted offer. In especially competitive situations, buyers may need to focus less on securing a discount and more on presenting a strong, straightforward offer.

On the other hand, if there has been limited interest in the property, the seller may be more open to discussing both price and terms. Remember that this can vary from suburb to suburb, and even from one type of property to another. There may be plenty of properties available nationally while three-bedroom family homes in a particular school catchment remain highly sought-after.

Your local market matters more to your negotiation than the national market headline.

Consider how accurately the home has been priced

Sometimes the strongest negotiating opportunity isn't a weak market. It's an overpriced property. Buyers should compare the property with similar homes currently for sale, but completed sales can be even more useful because they show what buyers have actually been prepared to pay.

Consider factors such as:

• location and position within the suburb or estate

• property size and erf size

• number of bedrooms and bathrooms

• condition and required renovations

• security

• parking

• views and other desirable features

• recent comparable sales

If the asking price is substantially above comparable market value, you may have a reasonable basis for making a lower offer. The important distinction is that the offer should be supported by the market, rather than simply being low for the sake of negotiating.

A lower offer isn't always the strongest offer

Price is important, but sellers may consider more than the number written on the offer to purchase. Imagine one buyer offers R1.95 million but still needs to sell their existing property before proceeding, while another offers R1.9 million with finance already assessed and no property to sell.

Depending on the seller's priorities, the lower offer could potentially be more attractive because it carries fewer complications. Your negotiating position can therefore be strengthened by being prepared. Before making an offer, understand your budget, investigate your financing options, and know which conditions will need to be included in your offer. The easier and more certain the transaction appears, the stronger your position may become.

Know your maximum before negotiations begin

Negotiating successfully doesn't necessarily mean getting the biggest possible discount. It means buying the right property at a price that works for you.

Before making an offer, decide what you are genuinely comfortable paying. That number should be based on your finances rather than the fear of losing the property. It can be easy to stretch your budget when a seller counters your offer or another interested buyer appears.

But remember that the purchase price is only part of the cost of owning a home. Your monthly budget may also need to accommodate rates and taxes, levies where applicable, insurance, maintenance, utilities, and other household expenses. Knowing your limit before negotiations start makes it much easier to recognise when to increase your offer, and more importantly, when to walk away.

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Should you make a low offer just to see what happens?

You can offer less than the asking price, but there is a difference between negotiating and submitting an offer that has little relationship to the property's value. An unrealistically low offer can sometimes work against you.

A seller may reject it outright rather than counteroffer, particularly if the property has recently entered the market or other buyers are showing interest. If you believe a substantially lower price is justified, ask the estate agent for information that can help you understand the seller's pricing and the local market. A well-reasoned offer is generally a stronger starting point than simply choosing a percentage to deduct from the asking price.

What about negotiating after a home inspection?

Price isn't the only opportunity for negotiation. If an inspection identifies defects or repairs that weren't obvious when you viewed the property, there may be grounds for further discussion depending on the terms of the offer and the circumstances of the transaction.

Buyers should, however, distinguish between genuine defects and cosmetic changes they simply want to make after moving in. An older kitchen you plan to renovate isn't necessarily a reason for the seller to reduce their price. An unexpected and material problem with the property may be a different matter.

So, how much below asking price should you offer?

There isn't one percentage that works for every property.

Instead, ask:

• Is the property realistically priced?

• How long has it been for sale?

• Are other buyers interested?

• What have comparable properties sold for?

• Does the seller appear willing to negotiate?

• How strong is my own offer?

• What is the maximum I can comfortably afford?

Those answers will tell you far more than a generic rule about offering 5% or 10% below asking price.

The goal isn't to "win" the negotiation by getting the seller to accept the lowest possible number. It is to reach a price that reflects the property, the market, and your own financial position and to know when the right decision is to walk away.

Your next step

If you're preparing to buy, start by working out what you can comfortably afford each month rather than searching at the very top of what you may qualify for. Once you know your realistic property budget, you can search with greater confidence and negotiate knowing exactly where your limit lies.