For a majority of homebuyers, especially first timers, purchasing a property is the single biggest purchase of their lifetime.
The Daily Mail Australia reported that a survey in the UK found that a large percentage of adults consider buying a house to be the most stressful thing they have done, outranking divorce, bankruptcy and even the death of a loved one.
The negotiation process causes most of this stress. Many people fear they will either not get the best deal for the property or the deal itself will collapse.
Before you can buy your new home, you will go through the negotiation process with a real estate agent.
Here are seven tips to help the buying process go as smoothly as possible and get your new home for the right price.
1. Know the market.
Before you submit an offer, put some time into researching the market. Have a look at the prices of recently sold properties. Remember to look at homes that are similar in land size, living space and features.
Now you know similar home values, you will be more comfortable with your decision and your offer has a much better chance of being accepted too.
2. Find out why the property is for sale.
Understanding the vendor’s motivation to sell will give you a leg up in the negotiation. The reasons they are moving could be as varied as upgrading, downgrading, relocation, financial reasons etc.
The seller might need to settle by a certain date or get a specific price for the property. By asking the listing agent as many questions as you can, you will be able to put together an offer that works for both parties.
3. Get your finances in order.
Mortgage pre-approval will be a great tool to have when you place your offer. The process of pre-approval can sometimes take months; many will not accept an offer with these conditions. If your finances are in order, it will increase the chances they will accept your offer.
4. If you like it, don’t wait.
If you fall in love with a home, you should act quickly, particularly in a competitive market. It is often the mistake of new homebuyers to take too many chances by offering a low price.
If there is a property you cannot live without, make your first offer the best. Although real estate agents try to get the best price for their clients, they also must operate in a timely manner. Real estate agents generally advise the seller to settle quickly on a decent offer, rather than risk having it on the market for an extended period of time and let the listing go stale.
5. Don’t be afraid to ask.
If you know a particular property has been for sale for an extended period, it either means they are not getting reasonable offers or maybe even none at all. Ask questions about the property and if they would accept a lower offer. If they have had trouble selling it, this might be a concession they are willing to make to close the deal.
6. Compromise is key.
Nine times out of ten, you will not be able to get everything exactly your way. In any negotiation, there will naturally be a certain amount of give and take.
Remember that the real estate agent is representing the interests of another party. If you go into negotiations realising this and are willing to compromise on features, terms, or price, you are going to be ahead of the game. Be polite, professional and respectful, the real estate agent’s job is to bring buyers and sellers together – demand and supply.
7. Think before you make an offer.
Thinking about putting down a really low offer? You might be thinking the seller might be desperate or not have a clue about the true property value. A good real estate agent will be looking after the seller’s best interest.
If you're serious about making an offer, do your market research and put an offer close to expectations. This does not mean you have to put your highest offer straight away, but at least it will start the negotiations and save you a lot of time and heartache.
Brendan Leahy is the founder and CEO of Naked Real Estate based in Perth, Western Australia.
Homely is a new way to search for property to buy and rent in Australia. Homely incorporates beautiful design and community engagement, to create an enjoyable and simple experience that helps you find a new home quickly.
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