Meeting the Challenges of Negotiating a House Price in a Seller’s Market
The property market is booming, and while that’s great news for sellers, it can make buying a house more difficult than ever. Agents have so many buyers on their books right now that house prices are through the roof. In some regions, they’ve even increased by more than 50% value in the past 18 months. As such, negotiations are phasing out and, in most cases, the highest bidder is the one who wins the sale.
If you’re new to buying, try not to be disheartened. While it’s certainly a seller’s market, you don’t have to settle on a property that’s less than ideal. Here’s what you need to know about negotiating house price deals in a seller’s market.
How to Negotiate House Price as a Buyer
If you want to get a great house at a great price, you’re going to need to negotiate. Sure, the market currently has plenty of people who are willing to take a house that’s a little run-down and just fix it up themselves, but that doesn’t mean you shouldn’t negotiate on your top offering. Here are a few ways you can try to win the price battle:
Get pre-approval
By having pre-approval on your loan, you’re more likely to have success in the purchase than someone who hasn’t seen the banks yet. This gives you leverage when the offers start rolling in. If someone offers $500,000 for a property, and you offer $490,000, but you’re the only one who has pre-approval, property owners may be more likely to sell to you as the loan is already guaranteed.
Shorter settlement dates
Another great way to have leverage over negotiations is by offering shorter settlement. For example, two people put an offer in on a house: $500,000 and $480,000. But the person offering $480,000 is open to settlement in 30 days, while the other wants settlement in four months. Most home sellers will gladly forfeit the extra $20K if it means they can sell the property much faster.
Get all the right inspections
In this competitive market, you’ll find that a lot of buyers are so desperate to buy, they will skip the usual steps to safeguard their purchase including building and pest inspections. Bad idea! It doesn’t matter how much you want to buy a house, if it turns out that in a few years’ time it’s infested with termites, black mould, or you discover structural damage that’s life threatening – your property could be a total money pit. Don’t be afraid to ask for all relevant inspections and if something isn’t right, ask the sellers to fix it or propose a discounted price for the property. You can always negotiate on faults found in a pest and building inspection provided the inspections are completed by a reputable company.
That’s Where Action Property Inspections Comes In
A thorough building and pest inspection report does three things: it makes agents nervous; it can bring sellers back to the negotiation table; and it ensures the property you’re buying isn’t a dud (posing a major threat to the safety of you and your family).
Negotiating house prices can be easier with a
pre-purchase building inspection. Book yours today.
