Buying a home is exciting, but there is always the fear that you are about to pay too much.
Real estate agents expect buyers to negotiate and are open to honest, truthful feedback. Here’s how to equip yourself so you can put forward a figure that is lower than the asking price but is still realistic.
Research the market
Before you start negotiating, research the current real estate market to understand the prices of similar homes in the area. This will give you an idea of what is a fair price for the place you are interested in. If you feel the seller is asking for too much given the size, condition and location of the home, don’t be afraid to say so, but be prepared to share evidence of why you believe this.
Get pre-approval for a loan and set your limits
Having pre-approval for a mortgage will show the seller that you are a serious and qualified buyer. It can also give you more bargaining power when negotiating the price because you can confirm you’re ready to sign a contract.
Come in low (just not too low)
If you offer the asking price, you will never know if you could have secured the home for less. When making an initial offer, it is a good strategy to start with a lower offer than the advertised cost. This leaves room for negotiation and gives the seller the opportunity to counter your offer. Be prepared to hear from the agent as to exactly why the seller wants the price they do; for example, their home may have features that put it above the competition in the area.
Be flexible
Be open to negotiating not just the price but also other terms such as the settlement date, inspection contingencies and repair requests. If you don’t mind doing a bit of rubbish removal yourself and the house definitely needs it, you may be able to get away with paying less.
Consider the seller’s circumstances
If the seller is motivated to move on quickly, for example, because they are relocating or it is a couple who has separated, you may have more bargaining power. On the other hand, if the seller is not in a hurry, they may be less likely to negotiate.
Ask the real estate agent how urgent the sale is and see what they have to say.
Be prepared to walk away
The rule of buying property is to do so with your head, not your heart. Be prepared to walk away from the negotiation if you cannot reach a mutually acceptable agreement. This shows the seller that you are not desperate and are willing to consider other options. It will also save you from overpaying just because you really like the place.
Be realistic and fair
Nobody wants to deal with a stubborn buyer who puts forward an unreasonably low offer. You might miss out to another buyer, and you might find the agent isn’t quick to reach out to you in the
future.
If you have done your research and can back up a low offer, do so.
However, it’s not a good idea to try to pay a very low figure just for the sake of it.
Need help to figure out what a home is really worth? Contact me today on 0410 665 947.
