A question every buyer asks us is how negotiable is the price? The short answer is ‘it depends’.
Every single transaction is different, so there is not one-size-fits-all tactic to negotiating. In the current market, the majority of real estate transactions that take place in Tokyo sell at full asking price or at a minimum discount (somewhere between 0 ~ 3%). Some buyers get too obsessed with the percentage discount and miss out on properties that were already priced in line with the market, and even some great deals. If getting the biggest discount is your priority, you may end up buying something no one else wanted or something that was overpriced to begin with.
In a strong market, the seller of a desirable property in an in-demand location may have multiple offers on the table. In that case, they may end up picking the one offering the best terms that looks the most likely to go through to settlement with little-to-no drama. If they do have multiple offers, it can be rare (it’s considered poor form) for the agents to engage in any bidding wars so you may not have a chance to increase your original offer. But, if you are the only interested buyer then there may be some back and forth as conditions are negotiated. Sometimes there is no back-and-forth, and your initial offer is accepted. That doesn’t necessarily mean you should have tried for an even lower offer. It might just mean the seller is not the type who wants to drag out negotiations by arguing over a few Yen difference.
Low balls
There are rare occasions where a seller may be so offended by a low offer that they refuse to take the discussion any further and refuse to deal with that buyer again. It’s unusual but it has happened. If you do want to make a low-ball offer, you will need to have some strong supporting evidence to support your argument and be willing to take the risk of being turned away completely by the seller and potentially even the brokers involved in the deal.
As always, your best bet is to discuss pricing, local market activity and potential negotiability with your trusted broker.
