Negotiating Your Purchase
June 8th, 2015 by Geoff Baldwin
When you have inspected a number of properties for sale in the suburb of your choice and in your price range, it is a relatively simple task to compare these values to the ultimate property you have decided to purchase.
Once you have made a decision to buy, don’t waste time contemplating the purchase, particularly if the price seems realistic in comparison with others you have inspected. Statistics show that properties listed at an asking price closest to their ultimate sale price, sell within the shortest possible time. It is a fallacy to think that every property vendor is asking a far higher price than the property is really worth; many urgent vendors will deliberately price their property down in order to obtain a quick sale.
Any agreement to purchase real estate must be made in writing and your local RE/MAX agent will guide you in completing the necessary contract by Offer and Acceptance.
It is customary for the written offer to purchase to be accompanied by at least 5 percent of the purchase price to bind the deal. A genuine vendor will expect a deposit and will measure your bona fides by the relative size of your cash deposit to the purchase price.
From experience a genuine property vendor will either immediately accept your price, or may “counter” your offer by inserting the lowest price he is prepared to accept. Tempers become frayed if this process is repeated indefinitely and it is therefore a wise decision to make your initial offer close to the price you are prepared to pay.
Important: Buyers can have a tendency to believe that the more they can negotiate off the asking price the bigger the bargain however it is critical to remember that it is value and not asking price that is important. If a property is $50,000 overpriced and you negotiate $40,000 off you still haven’t purchased well. On the other hand, if the property is priced spot on and you miss out to another buyer because you were focussed on paying less then neither is a positive outcome. Compare the property to others on the market and negotiate your price based on what the property is worth compared to its competition. A reliable guide is to ascertain the median price for the suburb and then decide wither the property sits compared to that guide.