05 Nov Five Questions to Ask Before Making an Offer
We all want to get a great deal when we buy a home, but it’s important to understand that the vendor also wants to do well out of the transaction as well.
Understanding just how much to offer for a property is an important step when buying a home and if you do your homework and ask the right questions, you’ll have a far better understanding of where your initial offer should be.
Just like you should be speaking to a mortgage broker in Melbourne before starting your property search, you should always ask these five key questions, before making an offer.
How did the agent set the price?
In real estate, there are good and bad agents. Some agents are good negotiators but don’t always know much about property.
For a buyer, this can be a good and bad thing. Often times an agent might not have set the asking price quite right. For whatever reason, the agent could wrongly believe a property is worth more than it really is.
Your job as a buyer is to educate the agent and get real market data on how much similar types of properties are selling for in the same area.
These days you can use the likes of realestate.com.au to see sales data from the last few months. Try and find properties of similar age, condition and land component and you can use these to show the agent that their price expectations are a little high.
We offer a free property report, that gives you all the information you need prior to making an offer.
Get your property report to give you an edge in the buying process.
What’s the vendor’s motivation?
Arguably the most important piece of information a buyer can have is to understand the seller’s motivation.
If a seller needs to make a sale happen quickly, they will be far more open to a lower offer if the terms are good.
On the flip side, if the vendor isn’t being pressured financially or for family reasons, then the odds of getting a highly discounted price are low.
Try to speak to the agent to uncover as much detail about the vendor’s situation as you can, prior to submitting an offer.
Are there other offers?
If you’re the only person bidding on a property then the vendor is in a far weaker position than they otherwise might be. If there aren’t competing offers, you might be able to get a lower offer through.
However, if there are two or more people that are interested in buying the property, the odds of getting a bargain are very low. Understanding your borrowing limit is important here so it’s worth speaking to your mortgage broker in Melbourne.
How old is the listing?
If a property has been sitting on realestate.com.au for many months with no offers then chances are it is priced too high.
If the vendor is being stubborn and doesn’t want to move on price then there might not be anything more to do. However, if the vendor is keen to sell, they might be open to lower offers to make a sale happen.
Has the asking price been dropping?
Sometimes when a listing gets no interest, an agent and vendor are forced to start dropping the price.
If the price keeps on dropping over a number of weeks, it’s a clear indication that the price expectations were too high when it initially launched. However, the fact that the price is falling demonstrates the vendor wants it sold.
This can be an opportunity for a buyer to come in at a more favourable price as both interest has likely dropped off from other parties and the seller understands they had been overly optimistic initially.
Are you getting ready to make an offer on a property?
Make sure you have you pre-approval in place as this can really add to the strength of your offer and even give you the ability to offer a shorter settlement. The best way is to speak to a mortgage broker in Melbourne about your financial situation and what you’re hoping to achieve.
Please contact us on 0488 814 148 to see how we can help you strengthen your offer.