Buying a property can be nerve-wracking, especially for first-timers.
Besides taking on the biggest financial commitment in your life, there's the actual mechanics of buying the property.
Most of the time in life, if we want to buy something, we just buy it, don't we?
We don't really need to negotiate on price (well, except in places like Bali) or be the highest or most attractive offer.
Instead, if we want to buy those jeans or that new car, we hand over our cash and simply walk or drive away.
But when it comes to property, that's not the case, of course.
And the biggest perceived hurdle is understanding how to get your offer accepted by the seller.
So, to help you be the property winner and not the second-place getter, here are four handy tips to get your offer accepted.
1. The right price
Let me be clear: there is an art to negotiation that most people must learn – sometimes the hard way!
One of the first rules in negotiation is to have undertaken the right amount of research.
Do you know what the “market price” is for that property?
Do you know what other similar properties in the same location are selling for?
A common mistake for new players is to try to offer a low-ball price, thinking that will set a floor under the price and show they're serious negotiators.
The thing is that this tactic rarely works.
In fact, what's likely to happen is you'll offend the seller so much that they may refuse to negotiate with you – and no one wants that, do they?
“A grade” homes or “investment grade” properties rarely sell for a "bargain" price, but that doesn't mean you shouldn't negotiate.
Instead of offering 20 per cent under listed price, perhaps consider what price is a reasonable reflection of the market.
Then offer a sum below that figure – that way, you will be in the ball-park from the beginning.
2. What's their motivation?
Another strategy to help you get your offer accepted it to understand what the seller's motivation is.
How do you find that out?
The key is to be friendly with the sales agent and ask them plenty of questions.
Why is the vendor selling?
Have they bought elsewhere already?
Are they interested in a short or long settlement period?
By knowing the answers to these questions you can tailor your offer to suit the seller.
Consider a seller who has bought another home and wants everything wrapped up quickly.
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In that scenario, you may consider a fair but unconditional offer that gives them certainty matched with a settlement date that suits their time frames.
3. Prepare to negotiate
It should come as no surprise that the vast majority of private treaty sales require some level of negotiation.
The seller may want $500,000 for their property but you have offered $475,000.
Of course, unless the seller or the buyer is prepared to negotiate you'll be stuck in a stalemate.
A professional agent – both for sellers and buyers – can help remedy this impasse so that both parties can meet somewhere in the middle.
If you're not prepared to negotiate because you have a number in your head that you won't budge from, then don't expect the seller to come down to your level.
Of course, if your research shows that the property is only worth $475,000 the you should stand your ground.
If the seller doesn't budge, then you walk away. It's never wise to pay over the odds for property.
4. Do you need to cool off?
Here's the thing: "clean" offers are the most attractive to sellers.
What do I mean by a clean offer?
I mean an offer that doesn't include too many (or any) special conditions – unless they're agreeable to the seller's situation.
Another strategy to getting your offer accepted is to consider removing some of the standard conditions such as the cooling-off period.
If you're confident in your desire to buy the property and you’ve got a loan pre-approval, then why would you need the mandatory cooling-off period?
By removing it, the seller will know that you're serious about moving forward with the transaction, which might just result in your offer being the winner – even if there is another offer on the table with the same price as yours.
The main point to all of this is that your offer should be reasonable.
Offending the seller will usually do you no favours whatsoever.
You must also be prepared to negotiate on price as well as conditions to give yourself the very best shot.
The reality is, once you've got the first few successful property purchases under your belt, your confidence will grow.
You'll then find buying, and negotiating on, property something to look forward to rather than one that turns you into a nervous wreck.
As opposed to buying a home where emotions play a role, investing in property is all about making sound, strategic decisions and knowing which cards to show and which cards to hold.
And, of course, knowing when to walk away when the numbers no longer add up.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
A perfect storm is brewing for our property markets in 2021-22, an you can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.
If you're looking at buying your next home or investment property here's 4 ways we can help you:
- Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! This will give you direction, results and more certainty. Click here to learn more
- Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property. Click here to learn how we can help you.
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