How To Negotiate When Purchasing Your First Property - Pearl Financial

How To Negotiate When Purchasing Your First Property

By Shane | First Home Buyer

Jan 02

When you buy your home, you’re certainly hoping to get the best price and terms. To do that, you need to know the basics in negotiating and that also includes familiarity with the market, down to the community and maybe even the street.

The desirable scenario that many would like to know is that if there are more properties for sale than people who are looking to buy them. If that’s the case, then there is usually more room for negotiation compared to a scarcity in inventory.

Once you found the ideal property you want to purchase, the next thing you need to decide on is how to bid for it. Do you place in a high offer to seal it, and risk wasting money? Or put a low offer and lose the possibility of owning your dream home? There are specific tactics that ensure you to get the perfect property at the best offer possible. Below are the significant stages you must consider in making an offer.

 

Before The Offer

  • Before making an offer, assess the amount you are willing to spend. Most of the real estate agents tend to show you homes that are fairly more expensive than your allocation. Having control over the budget will put you in a stronger position when it comes to negotiation.
  • Be mindful of your reactions while you’re on-site viewing. The seller might take advantage of your willingness to pay more if you obviously show that you have fallen in love with the property you were viewing. Just be normally cool, and raise your questions that will set you in good stead for the negotiation process.
  • Continue observing the property market, particularly the prices of the similar properties on sale in the area and how fast the turnaround is. If properties are moving very slowly and are usually going below the asking price, then it would be an advantage for you since you can place in a lower offer.
  • Provide a written list of agreement that you made with your real estate agent. Documenting it minimises the possibilities of disagreements that may arise later while still on the process.

 

Placing In An Offer

  • It is highly recommended that you put the offer into writing in order to reduce the possibilities of confusion or argument later.
  • The negotiation starts once the seller is interested in your offer. The negotiation will most likely be conducted through the real estate agent. Be aware that this positions you at a distinctive disadvantage wherein the seller has a professional negotiator, which is the agent. While leaving you on your own. If you find this as a major concern, then you can appoint a buyer’s agent.

 

After Closing The Offer

  • You may ask the seller to take the property off the market once the offer has been accepted. That is something they must do if they are really serious about the offer. Doing so will also prevent other prospective buyers striking into your purchase.
  • Try offering settlement terms and payments that will make it convenient for your seller and at the same time creates a win-win situation.

 

Settle with an offer that is acceptable to both parties. Remember that you don’t have to exceed the amount you initially set as your maximum allocation just to make ends meet. There is no property that is worth paying more than you

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About the Author

Shane specialises in helping Gen Y professionals and business owners make an impact by accumulating more assets, generating more income, and having more time to enjoy life. He has a Master of Applied Finance, an MBA, and a Master of Financial Planning. He is also a terrible golfer.

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