Finding your dream property may take longer than you envisaged. Don’t stress and remain patient. Give yourself time to look at as many properties as you can.
TIP Remind yourself regularly that purchasing a home can often be the largest financial decision you will make, and it would be foolish to rush it and get it wrong.
Once you find the property for you, the first challenge will be making an offer on the property. Not all properties are advertised with a price. At times, properties are advertised as offers above a nominal amount or offer between an upper and a lower amount. Irrespective, you should consider that there is always room for negotiation. The million-dollar questions are always the same: “How much is the seller prepared to negotiate?” and “How much should my starting offer be?”
Deciding what to offer depends on your own personal finances first and foremost as it needs to fall within your budget. Other factors that will influence your offer are market conditions, how long the property has been on the market, how much interest has the property created and how motivated is the seller. Most sellers are reluctant to volunteer how motivated they are to sell, and agents are working for the seller. Ultimately, some of the information you would like to have is not always accessible.
Before making an offer, you may consider asking the agents some questions.
How Long Has the Property Been on the Market?
Knowing how long a property has been on the market is important. If a property has been on the market longer than the average for the market, it may suggest that the property price is too high. If the property has been on the market dis-proportionally more than the market, then you can assume that the property is most likely overpriced or has some issue that has deterred buyers.
How Many People Have Been Through the Property?
Few people through the property can signal low interest. This can reflect the way the property is presented or the state of the market. Alternatively, where a lot of people have been through the property without a sale also raises questions as to why the property has not sold.
Why is the Owner of the Property Selling?
Understanding the reason for selling can often provide some insight into the motivation of the seller. If a seller is moving because of work, they will be highly motivated. If a seller has found another house, they are also likely to be motivated. Being relocated interstate or overseas for work can also add urgency to a sale. The need to sell quickly can certainly influence a seller’s receptiveness to a lower price.
Have There Been Prior Offers?
Be weary that you may not always get a 100% accurate response, however in the advent that there has been a prior offer, knowing the amount will help formulate some view in your mind of the seller’s expectations.
Information that is accessible to you, is historical information pertaining to the sale of properties in the immediate area and nearby suburbs. By the time you are ready to make an offer, you should be prepared and have a solid, current understanding of past sales in the immediate area as the basis for comparison.
TIP Once you decide what you are prepared to pay, consider that you are entering a negotiation, therefore, your upper limit is probably not the best starting point for your offer. Alternatively, a ridiculously low offer, may insult the seller and create a setback in your negotiation. Remember, that the number of choices you have diminish quickly when the property market is booming, and demand exceeds supply. There is no right or wrong answer. Do your research to identify the amount you are prepared to pay for the property. Ensure that it is within your budget and then enjoy the negotiation and the anxiousness, that comes with wanting your dream property and purchasing it for the best price.
Offers should be submitted in writing to the agent who has a legal obligation to submit all offers to the seller. Offers include the price you wish to pay for the property and any Conditions that form part of your offer. If you are uncertain about what conditions you need, speak to your solicitor and get advice, before you make a formal offer.
Also Read: How to get your first home loan