Five tips for making your offer count.
So you’re ready to go. You’ve found a property and you have made contact with the agent. Now is the time to put in an offer.
This can be a scary experience if you’ve never done it before.
So before you go in, let me walk through some do’s and don’ts to help you get over the line and get your offer accepted.
(And I can’t stress this enough.)
Do your research!
You need to know what a reasonable price for the property is compared to the rest of the market. No one will take you seriously if you go in too low, even though this is a common tactic. We’re not bargaining for silk skirts in the markets of India here, people!
If you go in too low you run the risk of putting the vendors off-side. They may not even want to go further into negotiations with you.
So know the local area market and offer a reasonable price as a starting point. Below what you hope to pay, of course, but still in the ball park. Show the vendors that you know your stuff.
Be ready to negotiate.
You may have done all your research and offer a price that you think is totally fair, and you don’t want to move much from your offer. But the vendors will want more than you offer, so you might have to offer them something.
Keep your heart out of the negotiating room! You may love this property but never tell the vendor that. They will use this against you, and they may end up squeezing you for way too much.
And never tell the agent how much you’ve actually got to spend, because that’s exactly what you’ll end up paying.
Be prepared to walk away.
If the vendor wants more than you know the property is worth, be prepared to let it go. There’s always another one around the corner.
If negotiating isn’t your thing and makes you nervous, you may want to consider getting an agent to help you. Chances are you’ll be dealing with the vendors agent, so it could potentially even the playing field.
Part of negotiating is to have a strategy. Part of that strategy is understanding why the vendor is selling. What’s their motivation? This is the first thing you ask when buying a car, right? So why not when you’re buying a house?
Talk with their agent. Knowing things such as time frames for settlement and if the vendors have already bought elsewhere will help you to work out your offer.
They may be highly motivated to get a sale, and willing to take an unconditional offer that is a bit lower, just to get the job done.
And having said that ask yourself
What conditions do I really need on my offer?
The most successful offers are streamlined, or “clean’ offers.
These are offers that don’t have too many conditions attached, or are conditions that work in favour for the vendor.
You may consider removing some of the normal conditions to make things easier for the vendor (and get you the sale, of course!)
Conditions such as the cooling off period.
If your finance is sound, you’ve got your pre-approval sorted out and you’re ready to move on the sale, your offer may be accepted over someone else’s of the same amount just because you’ve shown that you’re serious.
No cooling off period required.
So things to remember. Do your homework and start with a reasonable offer. Leave your heart at the door. Ask questions and prepare a strategy.
These things will all help you to get over the line.
And if you think the vendor is being unfair, because you know the market, be prepared to go somewhere else.
After all, you’re investing in property for the long term, right? So getting it right now will help you become an expert in the future,
… if you’re not one already.