22 October, 2021
Negotiating in a ‘hot’ market
WHEN it comes time to purchase your first or next property, there’s a few things to bear in mind.
The market at present is considered to be ‘hot’. That does not necessarily mean the property you are planning to inspect will be sold quickly.
There are times when sellers and real estate agents price a property up in the hope the market will come to them, achieving a higher sale price.
To ensure you have the best chance to secure the property of your dreams at a fair price, please bear in mind the following:
Be Prepared. Review the market. See what else is on offer in the area, review the prices currently on properties, and visit www.onthehouse.com.au to see what prices properties in the area actually sold for.
Know exactly what you want to achieve. If you are going into a negotiation with an agent, have clear outcomes in advance of the negotiations.
The terms of settlement, your price. Looking indecisive can work against you, the agent can feel you are
not serious or can nudge you higher, looking for that
Remember an agent gets paid by the seller and will in most cases earn greater commission if they can squeeze an extra thousand or two from the purchaser.
Have you finances in order before you start. Look for pre-approval for your home loan.
This will place you in the strongest negotiation position. A buyer with certainty, a buyer that will become unconditional with less angst for the seller.
Be critical and understand the drawbacks to purchasing the property. What needs to be fixed or changed.
This will not always reduce the price for you but may result in your offer being the preferred one the seller accepts, as you have voiced the drawbacks and you are prepared to accept them, whereas another buyer may not.
Try to understand the seller.Ask why the property is on the market, delve for whatever information you can glean.
Knowing why it is for sale and the urgency for the sale can assist in the successful negotiation for the property.
Be prepared to walk away. It does not have to be ‘purchase at all costs’. Never accept the statement that there are buyers queuing up for this property.
Be prepared to move on, there will be similar or better properties next week or next month.
In a booming market it is said the sellers control the outcome.
If you have your finance in place, you know the market and also comparable values and sale prices, the control starts to even out. Afterall, a seller wants a result and you, as the buyer have the funds they want.