You’ve been approved for your mortgage, gone house hunting every weekend and you’re thrilled… you might just have found the house of your dreams and you can’t wait to buy it. Stop right there! Buying a home is a huge decision and before you make an offer on a house you should follow these simple tips to help make sure you get the best possible deal.
1. Research, research, research!
The importance of research cannot be overstated, when looking to make an offer on a house you have to have a solid understanding of the real estate market you are in. Before you make an offer on any house, you should be able to compare it to at least five other houses in the same area and price range. Write up a list of pros and cons for all the houses you have seen, and as you go through this process and compare lists, you will have a better understanding of the market and know a great deal when you see one.
2. Keep your cards close to your chest
When inspecting houses you are interested in, even if it is the dream home you have been waiting for, be careful not to get too excited in front of agents of owners. Be methodical, have a list of questions and make house inspections a routine process, nothing lights up dollar signs in a real estate agent’s eyes quicker than a potential buyer gushing over how fabulous the house is.
3. Find out why they are selling
People sell their homes for a multitude of reasons and finding out the seller’s motivations can be key to getting the upper hand when negotiating over the price. If they are leaving for another state, or even another country, they may be keen to make a sale as soon as possible. If it is an investment property, they may have all the time in the world to hold out for an advantageous price.
4. Set your maximum price
Many a home-owner has gotten themselves into trouble in their eagerness to buy the perfect home, allowing the price to creep up by increments because they just couldn’t walk away.
If you’ve just been approved for a home loan like a Clear Path Home Loan from BOQ you should know exactly what your budget is, and during your application process you should have asked your broker about the many ancillary costs that often overlooked. So, set your maximum affordable price and stick to it, paying just a few thousand dollars in the sale price can add up to a lot more over the life of your loan. So if they seller won’t reach your price, walk away, there are plenty of homes on the market and it won’t be long before you find another suitable one.
5. Go in low
This can be delicate, a ridiculously low offer can lead sellers to think you are not a serious buyer, and hurt your chances of getting the house you want. But starting with a low but reasonable bid leaves you plenty of wiggle room, if you come in too high, you might have already exceeded their minimum price before proper negotiations begin.
6. Be ready to walk away
It is crucial to have a clear check-list of what you want in your new home, where it is, what the surrounding amenities offer, and of course, your maximum price. You also have to be clear which of these factors you will negotiate on and which you won’t. This way when it comes to crunch time, and the deal does not meet your criteria, you can be confident in walking away to fight another day, rather than entangling yourself in a deal in which you are not happy with.
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To sum it all up, as the boy scouts say, be prepared. By following these few simple tips, you will know where you stand, and be much better positioned to get a good price when you sit down with a seller to negotiate.