Buying a home is one of the most exciting purchases we can make, but also one of the most stressful experience for some of us.
Having a good knowledge of the housing market is essential before you even start looking for a home. Here is a short list of what you should not do when it comes to negotiating the right price for your dream home:
What you should do: conceal your emotions. Point out factors that might realistically impact the value of the property (work required to be done, structural defects …). Make sure you get the building inspection report, a copy of the contract and the pest report before making an offer.
What you should do: to be able to negotiate effectively, you need to have done your research. Go to inspections and get a good picture of the property market in your area before making an offer. To build up a strong knowledge base, use a new home buyers checklist for each property you inspect.
Revealing your walk-away price
What you should do: keep your cards to yourself … unless you are pushed to reveal your budget. If so, advise the seller/agent that you have adequate finance approval but are looking to buy a property at market value. Indicate a price that is lower than what you are capable of spending.
Making a silly low offer…
…that could damage your relationship with the seller.
What you should do: get to know the seller’s story. Ask questions: how long has the property been on the market? why is the vendor selling? how desperately does the vendor want to sell? has it been passed in at an auction?… (Marital breakdowns, deceased vendors or failed sales attempts can benefit you when negotiating purchase price.)
Not being ready and able
What you should do: be organised before you enter property price negotiations (know borrowing capability). It will leverage you as a serious buyer and prevent problems securing the property down the track. Let the agent know if you can settle within a shorter timeframe, or waive the cooling off period.