If you are getting ready to buy your first home – congratulations! This is the biggest purchase you are likely to make in your lifetime and one that is a significant investment in the stability of your future. However, to make sure that you get the best deal, you should never just offer the asking price for your dream home. By negotiating a little, you could save hundreds or even thousands of dollars which you can then put towards furnishing your new home. Even if you are already on the property ladder, negotiating can still save you some all-important funds.
To help you with your property purchase, here are some negotiating tips that every home buyer must know.
Get a ‘mortgage in principle’ signed off
A mortgage in principle is a document that shows that a lender has accepted your mortgage application and is willing to lend you a specific amount. This maximum loan amount is usually detailed on your agreement. Proof of your mortgage offer is essential if you want any seller to take your offer on their property seriously as it shows that you are committed to buying a home and have the funds offered to you, ready for when you find the property of your dreams.
Research has shown that sellers with a number of offers are much more likely to do a deal with a buyer who already has a mortgage in principle in place.
Do your research
If you want your negotiations to be taken seriously, you must do your research. There is nothing more frustrating for sellers than trying to negotiate with prospective buyers who haven’t done their research – and your lack of knowledge will be glaringly obvious. Find out how long the property has been on sale for, what interest has been shown and what offers, if any, have been made and rejected. The longer someone has been waiting to sell, the more likely they are to lower their asking price.
You should also look into the average selling price for comparable homes in the same area. If you can argue that the vendors are asking too much when other local homes of the same size and condition have sold for less, then it could put you in a strong position at the negotiating table.
Start any negotiations with a low offer
One of the biggest mistakes made by rookie home buyers is to get so wrapped up in the thought of their first property purchase that they go in with their first offer much higher than they intended. This can leave you out of pocket, especially if the house you are hoping to buy needs money spent on it to bring it up to standard. However, when you go in with a low offer, you have plenty of scope to increase it if you need to and this will make you seem more attractive to the seller. It will also enable you to counter any other offers that may go in (if you feel that the property is worth the increase).
Consider haggling over the ‘extras’
Some sellers will simply refuse to lower the asking price of their home, no matter how hard you try and negotiate. For many, it is a matter of principle and they want to be able to say that their home sold for as much as possible. Nevertheless, it is still worth trying to haggle over some of the other expenses of buying and selling a home. For example, you could ask that the seller leaves certain features or appliances in the house.
Sell yourself to the vendors
There is little harm in making the vendors of your dream property aware of why they should sell to you – provided, of course, you have some reasons to give them. If you have already sold your current home or are a first-time buyer, you are in a much stronger position than someone who has only just listed their property for sale. And again, a mortgage in principle also makes you a much more secure and attractive option for a fast, complication-free transaction.
Opt for an experienced realtor
Property negotiations can be stressful, especially if you are fairly inexperienced. However, by hiring an experienced and competent realtor, you can leave the majority of the discussions with the vendor to your realtor. Your realtor will have the knowledge and skill to be able to identify which areas you can potentially negotiate on, and what costs and demands are reasonable. They can then enter discussions on your behalf and will work hard to secure you the best deal possible on your dream home.
If you are in the market for a new home, let our experienced and dedicated realtors take the sting and stress out of purchasing negotiations. Call us today to schedule an appointment.