It’s the standard scenario: the vendor wants the maximum price and you don’t want to pay a dollar more than necessary. It follows that negotiating the purchase of a property can be stressful, but great deals rarely occur by accident.
Buyers’ agent, author of The insider’s guide to buying real estate and EPS Property Search founder, Patrick Bright, has some tips to help you get value for money.
Know the market
If you have deep knowledge of the market in the area you’re interested in, you’ll understand what properties are worth there, and be able to negotiate accordingly.
Unfortunately, there are no shortcuts. Suburb reports may provide a reasonable guide, but to really get up to speed you’ll need to spend several Saturdays doing primary research.
“You should aim to look at 100 properties over a two- or three-month period, inspecting them and following up what they sell for,” Bright says.
“At the end of it, you’ll be as smart as the sales agent on value and be able to comment with credibility on what something is worth,” he adds.
Don’t name your price
If a property ticks all your boxes, it can be tempting to start talking turkey straightaway. Resist the urge, Bright says – your best chance of securing a good price is not to nominate yours.
If you’re really taken with the place, you’ll likely value it higher than it’s truly worth, while the vendor may be willing to let it go for less than you expect.
“Agents will always ask you what you think a place is worth, at the open home or afterwards on the phone,” Bright says.
“Never answer that question – turn it around and ask them what they think it will go for, or the price the vendor wants. If you name a figure, you’re very likely setting yourself up to pay more than necessary.”
Handle with care – the auction angle
‘Going to auction but open to offers prior’ is a common seller’s position. Think carefully before submitting yours, Bright cautions. If the owner is genuinely keen to shift the property quickly, you may be in with a chance. But if they’re happy to hold out, the figure you nominate may become the reserve price.
A united front
You’re happy to play hardball, but your partner’s already let slip they’re in love with the house … if there’s more than one party involved in the purchase, maintaining a united front is vital.
“Never have two of you talking to the agent or they’ll play you off against one another,” Bright says, adding, “Be clear at the outset which of you is going to do the talking and stick to it.”
Keep your distance
It’s not social, it’s business, so there’s nothing to be gained from telling the agent about your job, your family or your hobbies.
Keep conversations short and business-like, Bright advises.
“You don’t want them to form too much of a picture of your motivation or your ability to pay.”
Sort your finances
It’s pointless doing a killer deal if you don’t have the funds to follow through.
“The sum you’re able to access will determine where you can look and how much you can offer,” Bright says.
“Go and see your broker and get some clarity about your position before you start your search.”
Smart buying begins with having finance organised. I can provide you with information about your borrowing options and help you obtain a pre-approval.