When you purchase a home for the first time, you will inevitably have to go through various negotiations with the agent selling you the property. This can be quite a daunting experience. But with sound strategies and the right information, you can ensure that you don’t receive a short end of the deal.
Before you make any final purchasing decisions, you need to know how to negotiate buying a house.
Avoid nifty negotiations when you purchase a house. Consider these ways to effectively negotiate and close the deal:
1. Get to know Real Estate Agents in the area.
It might be tempting not to get to know the local real estate agents in the area when you want to purchase a property, but it will actually help you more in buying a home. In particular, real estate agencies in Macquarie Fields can connect you immediately to a real estate agent to assist you. These real estate agents are not randomly assigned either since they are extensively knowledgeable about their locality.
So, say you are eyeing a potential property in Raby. The real estate agency can immediately connect you to a local Raby real estate agent who will help you find the right property for you. They will tell you about property laws and also assist you in negotiating with the seller and communicating your offer letter. They will also serve as a mediator between you and the seller and will help bring all parties together.
2. Organise Your Finances
One of the reasons home buyers are advised to settle their finances first and get their loan pre- approval before going house hunting is to secure the home as soon as they make an offer. Otherwise, if you have not gained a pre-approval for your mortgage by then, you will likely lose the property to another potential buyer. Having a pre-approval letter in your keep increases the strength of your offer letter and assures the seller that you can pay for the house.
3. Get to Know the Market
Certain homes may have more traffic than others, so you might have to compete with other homebuyers interested in a property. In this case, one thing that you can do is weather the market’s state. Like all other commodities, real estate also has its cold and peak seasons where it enters either a buyer’s or seller’s market.
4. Understand the Buyer’s Market
There are surplus properties in a buyer’s market with lesser buyers. Because of this, sellers would most likely compete by lowering their prices to make it more attractive to the small pool of buyers and get the property off the market. Sellers are usually more open to negotiations during this time. You can haggle strategically all you want.
Another advantage of waiting until the market sets on this mode is that you can take your time in seeing many properties as you want, and you will probably not lose out on others because you have less competition. This allows you plenty of time to decide on a property and possibly make a lower offer than usual to the seller.
5. Be Familiar with the Seller’s Market
On the other hand, a seller’s market happens when the demand is higher than the supply of properties. Competition is high during this period, and you may have to increase your price offer for it to stand out to the seller since it will usually be decided through bidding wars. Whoever has the highest bid gets the house at this point.
When purchasing in such a case, you need to check your finances ahead of time, assess how much you are willing to pay and decide on the roof of your budget. You need to proceed with caution and be extremely patient in this process. Bidding wars can be exhausting and frustrating,
especially when you lose out on a property, and it might increase your chances of paying more than how much the property itself is worth. Perhaps, if you have a flexible schedule, it’s best to wait for the market to set in a neutral or buyer’s market before purchasing however do be careful as what may look expensive today may be considered cheap in future.
However, if you are decisive in purchasing a property at this time, you can make it easier by setting your priorities ahead. Sellers, at this point, have the upper hand in negotiations. You might not have much elbow room in asking for a price reduction and may need to offer above the asking price to secure the property.
It will also help if you do your research beforehand and compare the price of the property to other similar properties to know if the value of the home is comparable to others through online and physical research.
6. Get a Building and Pest Inspection
Purchasing real estate is one of the largest purchases you will ever do in your lifetime. Organising for a building and pest inspector to complete a report will ensure peace of mind as it shows all the defects of the home, which will then allow you to make an informed decision on whether you wish to proceed or rescind the Contract.
7. Make Counteroffers
Your initial offer will most likely not be accepted immediately, and the seller might give you another counteroffer. These counteroffers limit the purchase price and include the closing date, closing costs, and clauses in the contract along with a non-refundable deposit if the offer was to be accepted.
8. Consider the Closing Date
Sellers might negotiate when the closing is held for many reasons, such as that they might need to prepare to vacate the place or find a new place simultaneously. Hence, buyers should be flexible on the closing dates as well.
However, if this is not possible or does not fit your circumstances, such as when you need to move immediately for a new job or another, you can always give a counteroffer. They might also ask for a higher price in response.
9. Factor in the Closing Costs
Closing costs are fees that the buyer and the seller usually need to settle to complete the transaction and transfer the title. These are costs separate from the purchase price and are quite expensive such as stamp duty and solicitor fees.
10. Discuss the Contingencies
All the previously mentioned will ultimately be stipulated in your contract, but even then, there might be clauses still that you and the seller might disagree on so, make sure to contact your solicitor as well and discuss other possible counteroffers you can give until you reach a middle ground.
In the Know
Real estate is a business, so you need the help of professionals to know how to create a smooth, pain-free experience. For that, you need List and Sell. Get in touch with us now.