Hey Guys I am looking at buying my first property to live in. I wanted advice on negotiating prices in the property I am interested in for example if the property was advertised $250,000 – $280,000 how would I approach this the best way just start negotiating from low? to be honest I don't have much of an idea ?
Thanks
Matt
Hi Matt
Firstly, I wouldn't base your offer on the listed price. You need to do some research and work out what YOU believe it's worth.
Look at comparable sales/listings, the condition of the property, the reason it's being sold, etc. There's heaps of things to consider – this isn't an exhaustive list.
Once you've worked out how much you're willing to spend – base your initial offer at a price that allows you to move up a couple of times. Don't offer up your max price straight away – negotiate up to it.
Also look into why it's being sold. You may be able to come up with some conditions that aren't price based but benefit the seller and yourself – such as a long/short settlement or a rent back period.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Research prices paid (not advertised) for like homes in the area to base a fair market value Do inspections of it and other properties to further develop your valuation. It will invariably be below the starting price but don't be deterred. Decide on an absolute maximum you are willing to go to and lock that in your mind. Make sure you have developed a finance plan and if an offer that is not subject to finance with short settlement is possible by you,this can be a big incentive to some sellers who are keen to move or buy another property they want.
Remember there is a bit of blue sky in some property prices being advertised at the moment so stick to your values. There is another deal around every corner!
Make your offer subject to whatever conditions you want to apply including building and pest inspection and I would add a Due Diligence clause to give you an out without cost to you if you turn up any thing that is a problem to you.
Put your first offer to them and expect they will come back. Remember everything is negotiable and you can always raise the price but only come down if the property does not meet your contract conditions so the contract will fall over unless they negotiate on price based on problems found. have your contract reviewed by your legal advisor before you sign the contract – don't be pressured by the agent saying another contract is due to be signed so get in now.
Once you sign a contract Hire a good independent Building and Pest Inspector and I like to attend the inspection or have a rep of mine there. dont use the one offered by the sellers agent!
Remember negating the contract price is a bit like a poker game, if you show your cards you will be pushed to your limit straight away so put emotions aside and negotiate the best deal to suit you It can go backwards and forwars as many times as you like and if the final bottom line the seller is willing to take is a bit high you could possibly ask them to throw in items to sweeten the deal enough for you to agree.
Which city are you buying in?
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