With the right negotiation tactics, you can make that slightly over-budget dream home—yours.
Imagine shopping around for months before discovering a 1400 sqft, 3-bedroom apartment that comes complete with a spacious balcony, and equipped with full facilities . In short, you’ve found your dream home.
You made an offer, which is slightly below the market price, but the seller refuses to budge even a cent below the price offered. Would you just grit your teeth and fork out your last cent or turn your back and walk away from that home ownership dream?
Negotiating for the best deal on your dream home can be tricky business, because when it comes down to it, both buyers and sellers are looking to get the most out of the transaction. This dilemma is why it is important to get the right agent that will help you negotiate a price that works for you.
1. Make sure that you’re pre-approved
Once you’ve found your dream home, you probably don’t want to waste time going back and forth trying to negotiate a price. Getting pre-approved means you’ll know how much you can afford based on how much a bank is willing to loan you.
Think of a mortgage pre-approval as a health check of your finances, it is a proof of funds to show that you can indeed afford to buy and that you’re a serious buyer. Most sellers are more keen to consider an offer if you’ve already got a bank that’s willing to vouch for you.
“Even if a higher budget can be allocated, a suggestion would be for buyers to still keep the offer slightly below average. This way you have a lot of wiggle room and excess fund to design the house to your taste,” suggests a representative of IQI Realty, winner of five award categories.
2. Get an agent who specializes in that area
Getting an area specialist that could represent your needs well will benefit you greatly. This is especially beneficial for those buying a property in a state or country in which they don’t live. An area specialist could share extensive information with you that a non-area-specialist could not, which includes information on the seller’s motivation for selling and the area’s crime rate record.
“An area specialist would know all the right questions to ask and get you the best deal in town,” reveals Jake Ching, Senior Negotiator of Tech Realtors Properties and winner of Exceptional Deal of the Year (Commercial) awards.
3. Research, research and research
You can’t go to court to represent a client without thoroughly studying the case, right? Well, the same applies to property negotiation. First, you need to gather information on the market condition in that area and the surrounding neighborhood.
Secondly, gather information such as how long has the property been on the market, what was the market price when it was purchased to get a gauge of its appreciation value, the renovations that have been done to the property and the owner’s selling motivation.
“Do a price range survey and an analysis on the unique selling point such as infrastructure in the area, public transportation, major highways and education hubs as well as other amenities,” advices a representative of Dreamvest Realty, winner Agency of the Year (Gold) award and Star Real Estate Agency (Central Region) award at the of AAA 2018
4. Be upfront with your agent
Since the agent will be representing you during the negotiation, communicate clearly and transparently the reasons you wanted to buy a property in that location such as travelling convenience, good schools, your budget as well features of the property that qualify it as your dream home.
Winner of five award categories, GPlex Realty stresses that getting your dream home is not always about buying the cheapest or the most expensive. “Through my experience in property, there will never be a property that can satisfy 100% of your requirements. Therefore, it is important to recognize your needs and if those needs match your financial capability during the period of purchase.”
“Be realistic and tell your agent the features and amenities that you are willing to compromise on,” adds a representative from Allhomes Properties, winner of Leading Digital Real Estate Agency (Platinum) award. “That way if the negotiation is unsuccessful, they can quickly move on to the next property that matches your dream home requirements.”
5. Get creative with your offer
Property negotiation isn’t always about the price. “Don’t put all your eggs in one basket and hope for the price to drop. “There are a lot of things that can be negotiated,” shares a representative of GS Realty Ipoh who bagged the Star Real Estate Agency award for Northern Region.
For example, you may not be the highest bidder in terms of price, but you can certainly offer a high deposit of “earnest money,” to show that you are a genuine buyer – or offer a shorter closing date.
You can also negotiate to purchase the property along with some or all of the furniture and appliances inside it, request for add-ons, or demand for repair works to be done.