Once a prospective buyer appears for a property on the market, you may receive an offer to negotiate on price or terms. Here we look at how to approach sashine (price-cut) negotiations, and what's worth deciding in advance.
- Price-cut negotiations typically arrive when a buyer submits a purchase offer after a viewing.
- Whether to accept depends on the level of interest so far, the timing, and the balance against your costs.
- Even if you decline, aim to communicate it in a way that doesn't damage the relationship.
- Negotiations can also involve terms beyond price, such as the handover date or fixtures left behind.
- Working out your minimum acceptable price and negotiable terms with your agent in advance makes it easier to handle negotiations.
When Price-Cut Negotiations Are Most Likely
A price-cut negotiation is often brought up at the stage where a prospective buyer, having finished a viewing, submits a purchase offer (kōnyū mōshikomisho). It's typical for the buyer to present their desired price as a result of their mortgage pre-approval status or comparison with other properties. There's also a tendency for these offers to come in more readily once some time has passed since the property went on the market — a point at which the buyer may perceive the seller as getting anxious — rather than in the early days of the listing.
Criteria for Deciding Whether to Accept
Whether to accept a price cut is judged by weighing the volume of interest so far, how often you've had viewings, how much time has passed since listing, and the balance against your costs and moving schedule. If you have reasons to sell quickly, deciding in advance on a range of price cuts you'd accept makes it easier not to hesitate when the moment for negotiation comes. If there's no other strong prospective buyer, it can make sense to prioritize closing the sale even if it means accepting some reduction. Conversely, if several prospective buyers are showing interest, choosing to hold firm and wait is also a reasonable option.
How to Communicate a Decline
Even when a price cut falls short of what you're hoping for, it's best not to decline emotionally — instead, explain your reasoning through your agent, referencing the basis for your price and the level of other interest, and communicate it politely. Staying firm while being careful not to damage the relationship makes it easier to leave room for renewed negotiation later on.
Negotiating Terms Beyond Price
Negotiations can involve terms beyond price — adjusting the handover date, leaving behind fixtures such as air conditioners or light fixtures, or the amount of the deposit, among other things. Even if you can't budge on price, there's room to consider whether you can find common ground on other terms. For example, some negotiations are settled by keeping the price as is while shifting the handover date closer to the buyer's preference. Listening carefully to the buyer's circumstances often reveals points of agreement outside of price.
Lines Worth Deciding with Your Agent in Advance
To avoid scrambling once negotiations start, it's a good idea to work out with your agent, in advance, the minimum price you're willing to accept and which terms you're open to conceding. Sharing this policy in advance makes it easier to respond consistently when the negotiation actually happens.
Pricing to Reduce Negotiations
Setting a price that's less likely to invite price-cut negotiations in the first place is one approach worth considering. Be aware that setting a price far from market value from the outset can encourage buyers to negotiate on the assumption there's room to cut. We look at how to set your asking price and when to lower it in sell-07.html — worth a look as well. If interest is low, sell-10.html covers points worth reviewing. Pricing the property appropriately from the start keeps the negotiating range small even if a price cut is proposed, which also tends to ease the emotional burden.
FAQ
Do I have to accept a price-cut negotiation?
There's no obligation to accept. You're free to decide whether to accept based on the level of interest so far, the timing, and the balance against your costs.
How much of a discount is typical?
It varies depending on the property, market conditions, and timing, so there's no single answer. We recommend checking with your agent on trends in similar negotiations in the area before deciding.
Is there a way to reduce price-cut negotiations?
Setting an appropriate price from the start of the listing is said to be effective in avoiding excessive price-cut negotiations. We cover how to set your price in sell-07.html.
Summary
When it comes to price-cut negotiations from buyers, it's important not to react emotionally and instead follow the criteria you decided on in advance. We recommend looking at the terms as a whole, not just price, and sharing your policy with your agent as you go in.