Property buyers need to know how to make an offer on an apartment so that they don’t act too fast and overpay or, conversely, muck around and end up missing out to another buyer.
The fundamental rule to follow under most circumstances is not to make an offer until you are ready to sign. So, what do you need to do to get ready?
First and foremost – get your finance approved and deposit arranged!
When you find the property you want to buy, recognize that your emotions are probably driving your decision making. For instance, don’t let fear of missing out lead you into paying too much. In a slow market agents often encourage buyers to make offers. Before you do, step back and really consider how strong the market is and whether it is competitive or not.
That said; work with the agent, not against. Don’t play games – it’s unlikely that you’ll be able to out-play the player. Let them know you’re interested and ask them what their negotiation process is. Agents do have favorites and they are more likely to give you information if you show them respect.
Set your maximum limit and true walk away price BEFORE you start negotiating.
There are 5 elements to consider when setting your maximum price:
- Your price research and where this property sits in the market
- Whether the market is hot or not
- How popular this type of property is
- How uniquely it suits your needs
- What you can afford.
Lastly: don’t forget to walk away if the price goes over your pre-set limit!
It is important to recognize that sometimes the actual price is not the most important thing to a vendor. Consider the terms of your offer. It’s a good idea to ask the agent whether the vendor has any specific conditions that would make your offer more favorable. For example, a long settlement might suit a vendor who hasn’t yet bought, or maybe you could offer a rent-back period. While a short settlement might appeal to a vendor who has already bought their next home.
Chady Melhem | Property Consultant
Call me for any advice you may need!