Top tips for sealing the deal when buying property
Competition for property remains fierce among homebuyers and investors alike in many capital cities, but, vendors aside, when it comes to buying property there can only be one winner. Desperation from would-be buyers to secure their property of choice is leading many to resort to the contentious early offer, which can be a double-edged sword for both vendors and buyers.
Competition for property remains fierce among homebuyers and investors alike in many capital cities, but, vendors aside, when it comes to buying property there can only be one winner. Desperation from would-be buyers to secure their property of choice is leading many to resort to the contentious early offer, which can be a double-edged sword for both vendors and buyers. This trend has led many to ask, when is an early offer the right choice and in what circumstances?
While the auction process can be daunting for some, it’s also transparent, which means buyers and vendors can accurately determine interest in the property, and at what price. For this reason in most circumstances it’s favourable to proceed with the auction process, rather than submitting a prior offer, to achieve a fair outcome for both parties and, if you’re a buyer, to avoid showing your hand to the agent should your offer be rejected and the auction proceed.
If you just can’t wait until the auction or it’s a sale by private treaty, make a prior offer – but be aware it may put you at a disadvantage. Making an early offer can put you at the whim of the selling agent, which could see you pay more than the property is actually worth.
Be wary if an agent is amenable to an early or prior offer as it may indicate you’re the only buyer at that price level. Understand, a prior offer can reveal your budget to the selling agent, which will be used unfavourably against you and other buyers to maximise the sale price, whether via private negotiation or at public auction.
But, while the sale price is important, it’s not always the most crucial factor for a vendor when contemplating an offer. Consider what conditions of sale i.e. an unconditional offer, a higher deposit or a shorter or longer settlement period, will make your offer more appealing to the seller. If your purchase is for investment purposes the prospect of renting the property back to the current owner may prove mutually beneficial, and a further incentive to accepting your offer. However, buyer beware. When submitting a prior offer it’s imperative to have a strong understanding of market values, remembering price doesn’t necessarily equal value. And, don’t take the listing price as gospel. It’s a real shot to the heart, and the ego, to find out you’ve overpaid for a property because you failed to do your research, or got caught up in the emotion or desperation of the purchase.
Research is the key to negotiating a price that is fair for both you and the seller. Compare the property with recent sales of similar properties, or, if it’s particularly unique or unusual, obtain a sworn valuation from a certified practising valuer for even greater certainty. While you may only buy a property once or twice in your life, you’re dealing with seasoned professional negotiators who buy and sell property on behalf of others every weekend. Therefore, if you choose not to engage a professional such as a buyers advocate or valuer, knowing the tips and tricks used by agents will help you hold your ground, and hopefully submit a winning offer.