August 03, 2017
Have you finally found your dream home after months of searching for the perfect one?
If the answer is yes, then congratulations!
Of course, before you start laying down property price offers you cannot afford, it is important to take a step back.
Indeed, it is easy when you are caught up in the excitement of finding and buying a home, to ultimately spend more than you wanted to.
Negotiating on the purchase price of a home is a challenging step, especially in a competitive market where the ball may be in the vendor’s court.
However, negotiating is an important step to take as it can make a significant difference to the cost of stamp duty and your mortgage.
Not everyone is a born negotiator, but here are six tips to help you secure your dream home for the best possible price.
Set your limit
Before you start looking for a property, make sure you have seen your local broker to obtain a loan pre-approval. This will provide you with a clear parameter for how much you can afford to spend on a home.
Be prepared to act
Preparation will benefit you when you’re negotiating on a property price. Make sure you have your deposit, pre-approval and legal capacity to buy all in order, as this will show the agent and seller you’re a serious buyer.
Research your market
Knowledge is power, so make sure you take time to research the local market you’re buying in. Go to inspections, auctions and find out what similar homes have been selling for. Suburb data and sales information can be provided by your broker and property websites.
Don’t be emotional
Conceal your emotions during the negotiation process. If you seem too keen on the property, the vendor may look to take advantage of that and charge you a higher price. Buying a property is a major financial commitment so do not feel pushed into making a rash decision. If your first offer isn’t accepted, take your time, consider your options and then go back in with another offer when you’re comfortable.
Keep your cards to yourself
Do not reveal your maximum price in the negotiation process, as an agent or seller will attempt to make you pay as close to that figure as possible. If you are pushed to reveal a budget, you can provide a price range to avoid under-pitching or over-pitching.
Find out the vendor’s reason for selling
When you’re inspecting any property, it is a good idea to ask the agent what the vendor’s reason for selling is. This can help you determine your next move and how much room you have for negotiating. For example, you may find out a vendor needs to sell the home quickly because they are moving interstate or going through a divorce, so they may be willing to opt for a shorter settlement and a lower price.
Finally, it is also a good idea to surround yourself with the right types of people. Get a good mortgage broker and solicitor on your side who can help step you through every part of the journey.