Decide on Your Budget
Be confident you know what you can afford and how much you can realistically afford to repay on a mortgage each month. Make sure you allow for increases in interest rates so you have a buffer. Don’t leave yourself short if there is the likelihood of a growing family. Remember, you won’t enjoy your new home if you stretch your financial resources too much.
Understand the Market
It is important to understand the local property market. The more knowledge you have of the market the better position you will be in to negotiate on a property. Remember, it is the owner who dictates the asking price, not the Agent and the owners expectations can be way over market price.
- Take into account the seasons as more properties are listed in spring and summer. If you miss something in winter, there may be something better around the corner in spring!
- If a property is listed at an inflated price, most buyers’ agents and savvy investors are likely to let it sit on the market for a number of weeks and wait for the listing to go stale before placing a low offer.
- If the property is competitively priced and is in a tightly held location, the first offer may need to be very strong in order to secure the property.
- You may need to act fast and place an offer within a day of viewing the property for the first time.
Learn to Play the Real Estate game
Real estate is all about negotiation and how you “play the game”. Here are my favourite tricks of the trade
- Always be polite to agents, even if you find some to be a bit dismissive. An agent will be more obliging and freely give you information if you are engaging in a polite way. You can then discretely find out the motivation of the vendors and the likelihood of them accepting a lower offer.
- Do bear in mind the estate agent is working on behalf of the seller, and wants to sell the property for as much as possible. They may not be forthcoming with the information you want, so be patient, polite, don’t bombard the agent discretely ask questions at various intervals whilst inspecting the property.
- You are more likely to get co-operation from an agent if you are not arrogant. Putting the property down to an agent flags that you are probably interested and you think by talking it down you may get it cheaper.
- It also sends signals to an agent that you probably can’t afford it therefore you feel the need to criticise the property.
- Don’t wear your heart on your sleeve.
- Don’t say in front of an agent where you will place furniture as this is the first signal of your genuine interest.
- Don’t be too passionate about the property. Keep your emotions in check.
- Be Ambiguous. Don’t let a listing estate agent or seller know your maximum budget.
- If asked about what you think of the property be polite and point out firstly some nice features and also highlight some disadvantages to the property.
- Mention that either you have just started looking or this is one of a few properties which may interest you.
- Try to get a feel for the owner’s position. Are they keen for a quick sale so they can move? Can they wait till someone comes along and pays the asking price? Finding out as much as you can about the seller gives you an idea of how likely they are to negotiate. Someone who needs a quick sale so they can complete their own purchase will probably drop their price so they don’t miss out.
Don’t be Afraid to Start with a Low Offer
- A lot of people are timid about putting in “too low an offer”. Depending on your culture it is either viewed by the party putting in the offer to be insulting or “the thing you do”. You could end up paying full price due to being timid about negotiating.
- Remember an agent is not allowed, by law, to disclose to other parties offers already put forward.
- The offer submitted depends on how the market is performing generally, how much activity there is on the property which is generally gained at the open for inspections.
- You should also factor in how much you really want the property.
- Before you make an offer
- Ensure that the agent you are speaking with is The Listing Agent.
- Ensure you put your offer in writing stating it is to be submitted to the owner of the property.
Understand it’s Not Always “Just About the Price”
Being flexible and thinking outside the square can sometimes be a win/win scenario.
- Some vendors can be more motivated by terms over price, this often occurs if they haven’t secured another property. An offer of an extended settlement period can be very attractive
- If you know they are downsizing, you can offer to purchase some of the furniture which is currently in the property. A perfect example of this is a billiard table.
- Be creative, I have even negotiated terms where a client settles on the property and leases it back to the purchaser for a set period of time.
Don’t be Bullied
Don’t be rushed or bullied into putting in an offer on the basis that “there is another or other offers” quite often that is not the case. Time constraints can add pressure and force you to make an offer you may regret.
Just as you want the best price, so does the seller. They’ll also have some negotiating tricks of their own so don’t feel pressured into a rash decision. They may tell you there’s lots of people already interested, they might say another couple have put in an offer too, or they could say they don’t want to drop the price at all. If it means you walk away from the property so be it. If the seller wants a sale that much they’ll soon be chasing after you with new enthusiasm.
Don’t Miss Out on Your “Dream Property”
Although we all like to think we have “got a good price”, sometimes the satisfaction of securing the right property is more rewarding than getting a great deal. Don’t live to regret not compromising because of pride or ego. At the end of the day, this will be your family home you need to be happy in “your space”, “your environment”. If you paid more and provided you could afford it, what does it matter? It isn’t always about money, it’s also about your personal happiness.
It can be extremely disappointing missing out on a property you like however in most situations you will find something better comes along and you can look back and say “I’m glad I missed that one”.
Buying a property is one of life’s BIG experiences, consider engaging a Buyers Agent to give you the edge during your all important property negotiations.
A good buyers’ agent has the knowledge and has researched the property to make sure their negotiation strategy gives you the best possible chance to secure the property at the right price.