When looking to purchase a property, having a few smart plans and strategies in place can give you extra bargaining power to negotiate.
Take a look at my seven key property price negotiating strategies that could help you save thousands on the price of your dream property.
1. Organise loan pre-approval
Having loan pre-approval in place shows the seller that you are a serious buyer. It gives you credibility with vendors and selling agents. It also allows you to know your borrowing capacity, so you can focus on properties within your scope.
As your local Mortgage Choice brokers in Joondalup & Clarkson, we can help you organise pre-approval for your loan - so you can take the first step towards successfully negotiating on your dream property.
2. Choose your team of experts
The next step is to make sure you contact a conveyancer or solicitor and a pest/building inspection team. It's important not to wait until you've found a property you like, as any time delays could see your property snapped up by a more organised buyer.
3. Keep your enthusiasm under wraps
Don't give away too much, too soon - even if you've found your dream home, try to act like you aren't as interested in the property as you (secretly) are. If the seller knows you're in love with the property, it could be a lot more difficult to negotiate on the price.
4. Perform the necessary checks
When you've found your dream property, be sure to have your solicitor or conveyancer review the contract of sale and arrange to have a pest/building inspection carried out for the property. If any issues emerge in the contract or the pest/building report, you can often use these to negotiate a better price.
If any issues do appear in the contract of sale, make sure you refer these to your mortgage broker to ensure these issues won't affect the approval of your home loan.
5. Get to know the market
Researching the market is vital when negotiating on price. If you know the price range of similar properties selling in the area, then you are able to understand whether the vendor has set an unrealistic selling price.
6. Allow yourself some wiggle room
Typically, the asking price of a property is approximately 5-10% higher than the sum the vendor is willing to accept. If you think the property is reasonably priced, start by offering 15% lower than the asking price - starting low gives you some wiggle room to negotiate upwards.
7. Consider the terms and conditions of your offer
During your property purchase negotiations, price is not the only aspect you should be considering. You might want to set the purchase subject to certain conditions. Here are some standard phrases you may use when making an offer;
- My preference for settlement is X days.
- I want to make an offer of $Y for this property.
- I will need a finance approval clause. Even though I have already seen my mortgage broker, I need to get formal approval for finance of $Z from "ABC Lender" and this may take up to 10 business days.
- My offer is subject to a satisfactory building report to be arranged by me
However, the more conditions you set, the greater the chance the vendor may reject your offer - or another buyer may be happy to sign the contract without conditions.
Lastly, it's important to note that once you reach the end of your negotiations, you will be signing a legally binding contract. So it's crucial that you seek legal advice on the purchase of a property, regardless of how good the deal may seem.
Call our team today at Mortgage Choice Joondalup & Clarkson on (08) 9485 0090 to discuss your loan pre-approval, so you can start your property purchase journey.
Dennis Aplin, Your Local Mortgage Broker
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