Buying a house for the first time? The negotiation process can be a minefield for the uninitiated. I know when I went through it recently I found it overwhelming, confusing and a bit intimidating. I couldn't help but feel I was getting it all wrong.

Based on the recent TV show of the same name, The School of Home Truths is a great book, filled with fantastic advice to make buying and selling property a lot more straightforward, not to mention show you how you can save a lot of money.

I really wished I'd read the below rules for negotiation, which we’ve extracted from the book, before I went through the process, but I’ll definitely keep them in mind for next time I’m in that situation.

The Most Important Rules for Negotiations Are…

1. Do not negotiate if you do not have to.
There are times when people get drawn into negotiations when they do not really have to, particularly if the market is strongly in their favour. Indeed, there are some people who never negotiate – either the deal is good (in which case they accept), or it is not (in which case they withdraw). If you tell the agent that you will not negotiate, then don’t. Not even a little bit (in fact, especially not a little bit). Do not even appear to be thinking about changing your mind – consistency is critical.

2. He or she who cares least wins.
If you give the appearance that the success of the negotiations is critical for you, you will be forced to make big concessions. The best state of mind is casual indifference. The slightest hint that you really need this deal to go through will lead to you having to make concessions.

3. Listen – and watch.
People usually think that negotiations are about
talking the other side round. In fact, less is often more – you may need to become comfortable with long silences. On Home Truths an agent was asked a simple question: How long had the house been on the market for? The answer to this simple question turned into a long spiel which included how the listing had been a nightmare because they could not easily get access to show buyers through. By ‘over-talking’ this agent needlessly gave away part of her client’s position. Information is the negotiator’s best weapon. You do not get information
by talking – you get it by asking questions, listening
and watching.

4. Use facts and figures.
If you are a buyer, use the things that you have picked up in the inspections: the borer fumigation will cost $1500; the bus stop is two kilometres away; there is only one telephone jack point. Sellers will draw attention to the features and benefits of the house; possibly show the buyers the registered valuation; point out other sales in the area; and underline the cost of the spa pool they recently installed. Facts and figures are difficult to argue with.

5. Keep your perspective.
An amount of $5,000 does not sound like very much
to add or subtract on a $500,000 house. However, you need to keep relating this $5,000 to the other things in your life: How long would it take to save $5,000? What sort of holiday could you have with it? How much interest would you save if your mortgage was $5,000 less? Relatively small amounts in the context of your house sale or purchase can be quite large in the context of the other things in your life. It may not seem it, but this is real money, every bit as real as if it was stacked up in $20 bills on the kitchen table.



Extract from The School of Home Truths - 8 Lessons for Buying and Selling Property in New Zealand. By Martin Hawes, Based on the TV programme of the same name.
RRP:$29.99 from your bookseller.

Keen to get on the property ladder? Westpac has some great advice for first home buyers. Read more here.