With interest rates at a record low, and the traditional Spring property season upon us – not to mention lighter restrictions in Mount Gambier and South Australia than other eastern States – the Mount Gambier property scene is expected to heat up in the coming months.
Listings for properties across the board are lower compared to the same time last year – which means more competition for properties, especially over these next few months.
If you find yourself in a good financial position, and ready to consider a property purchase before the end of the year, it’s time to equip yourself for negotiations to ensure you are in the best shape to bargain for the property you want, even before you’ve found it.
Whatever the economic climate, it’s rare that anyone is willing to pay above market value for a home. So below, we have six tips that should help to ensure that you nail the right price on the property you purchase.
It’s important to remember that successfully negotiating a property price is something of an art – there are very few who are great at it from the first time they attempt it. So take in the tips below, and be prepared to develop your skills and confidence over time.
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Research, research, research
Never underestimate the power of a good education – and this rings true for educating yourself about property, as well as everything else! Knowing a market, and the value of its properties should give you more confidence when negotiating the price you’re comfortable with. Your Mortgage Broker can also provide you with a property and suburb profile report that will offer valuable insights to help you make an educated offer.
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Know your ceiling price
Even before you being applying your negotiation tactics, you need to know your ceiling price – how much you can spend. Your Mortgage Broker will be able to research your borrowing power, and even arrange pre-approval for you, so you’ve got things sorted before you enter negotiations.
Knowing how much you can spend is particularly important if you are likely to be bidding at an auction. Auctions are different to a private treaty sale – which can have a ‘subject to finance’ clause that means you can back out of the deal if you can’t get a loan. Not the case at auction – you can’t pull out without being in breach of the sales contract. You will also lose your deposit.
Best to know what you have before you start.
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Pre-approval will give you confidence
When negotiating, you’ll be more confident if you know your finances are in-order. This is peace of mind that pre-approval provides you. It also gives you a potential advantage over buyers who may not have their finances sorted pre-property hunt. Speak to us about how to gain this with plenty of time to spare for your negotiations to begin.
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What’s the reason behind the sale?
Finding out the reason behind the sale can give you valuable information that can help you find an edge when negotiating a sale. For example, if the vendor is moving from the area, and the sale is sensitive to a time-frame, being able to offer a shorter settlement period for a discounted price could mean you’ve got a better prospect to secure the property.
Changing the settlement terms isn’t the only tactic – you could perhaps alter the deposit arrangement (eg: offer a larger cash deposit).
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Use your building and pest inspection report as a negotiation tool
If your building and pest inspection reports come back with a few surprises, it may give you leverage to get the vendor to lower the price. Of course, you may not want to buy a property that’s infested with termites, but if the issues are minor, you may consider buying anyway.
If you need a property inspection done, let us know – we have several providers that we would be happy to recommend to ensure there are no surprises after you’ve purchased the property.
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Know when it’s time to walk away
It’s vital when you are buying property that you remove emotion from what you are doing – as much as that is possible, anyway. It’s too big an investment for you to get caught up in the emotion of the process, or be influenced by anything other than what makes sense (common sense and economic sense.) So if a vendor won’t budge on a price that you are confident is fair, and is a price that is at your ceiling, walking away might be the most sensible next step – and you need to be prepared to take that next step.
You never know – walking away could be what they needed to make them reconsider, and accept your offer after all!
As we indicated earlier, successfully negotiating a property purchase requires a certain amount of skill, experience and know-how. With careful research, considered preparation and willingness to learn as you go, you will be on-track to achieve the result you want.
The most important tip to remember is, even before you start trawling through the new Spring listings, speak to Sinclair Wilson’s Mortgage Broker about getting your finance pre-approved so you’ll be ready to negotiate with confidence.
