Getting on the property ladder isn’t easy right now thanks to the rising cost of living and sky high interest rates. However, there is hope on the horizon in the form of lower house prices, mortgage rates, and income growth. While it’s too early to call a housing boom just yet, it may be heartening for prospective first time buyers to hear the tide is turning. But these aren’t the only hurdles that come with buying a home.
One of the biggest challenges that face individuals or couples looking to buy a house is figuring how much money to throw into the ring. Should you go big in a bid to seal the deal? Or should you lowball it and risk losing your shot at your dream home?
In this article, Lawhive’s expert conveyancers share their top tips for putting an offer on a house – and how to negotiate the best deal.
7 tips for putting an offer on a house in 2024
It would be dishonest of us to say that now is a good time to buy a house. Undoubtedly, many people are struggling to secure a mortgage due to higher interest rates. That being said, house prices have fallen since last year and there are early signs that the buyers market could be making a comeback in 2024.
So, how can you prepare for what’s to come? The first step is to have a solid strategy in place for making an offer and negotiating a good price. It’s time to put your game face on, roll your sleeves up, and check out our top tips for successfully making an offer on a house in 2024.
Do your research
Looking at houses is the fun part of buying a house. But before you start lining up the viewings, it’s a smart move to dig into how fast homes like the one you’re looking for are selling and at what price.
If your research shows that lots of similar homes are taking their sweet time on the market and going for less than the asking price, it’s a good indicator that you might be able to slide in with a lower offer.
On the flip side, if houses in the area are selling like hotcakes and for more than the asking price, you might have to go back to the drawing board when it comes to your budget or criteria of your dream home.
Doing your research early on can prepare you for what to expect and help manage your expectations of the kinds of property you may have a good chance of buying, and which ones may be out of your reach for now.
Wear your poker face
It goes without saying that before you start house-hunting you should have your financial ducks in a row. It’s always a good idea to have a mortgage agreement in principle lined up, along with a deposit, as it shows you’re ready and primed to make an offer. But exactly how honest should you be about your budget and your enthusiasm for a property?
Our advice: play it cool and don’t show your hand too soon. If you find a property that steals your heart, resist the urge to shout it from the rooftops as agents and sellers might take it as a sign you’re willing to pay more to get your hands on it.
As the old saying goes, knowledge is power, so it plays to your advantage to be curious when viewing properties. You absolutely should ask questions when viewing a house to gauge whether a lower bid is likely to be more successful such as:
- How long has the house been on the market for?
- Has the asking price dropped?
- Has the property had much interest?
- How quickly does the owner want to sell?
- Have the owners got a new property lined up?
- Is the seller using multiple agents to sell the property?
Listen carefully to the answers to these questions. If the seller is keen to get the property sold, it can provide you with good leverage to go in with a lower offer and potentially have it accepted.
Don’t offer more than the asking price
There is absolutely no need to offer more than the asking price for a house unless you know the seller has already declined an offer of a lower amount, or you’re super keen to secure the sale and you want to beat out the competition on price.
When you make an offer it should be realistic, but also reflective of the circumstances. For example, if there are clear signs that the seller is open to reasonable offers for whatever reason, or the house has been on the market for quite some time with no movement, you may be successful in offering under the asking price.
Ask for the property to be taken off the market
If you make an offer and it’s accepted, you shouldn’t be backwards in coming forward about asking for it to be taken off the market. It’s important to remember that, even if a seller accepts an offer, nothing is set in stone until contracts are exchanged. So, if a property remains on the market, even if it’s marked as ‘under offer,’ someone may swoop in at the last minute and make the seller an offer they can’t refuse.
Leverage property surveys
It’s always wise to get a survey done on a property you’re looking to buy, as more often than not they throw up potential issues which could cause a problem later down the road. Another advantage of having a survey carried out on a potential new home is that you can, and should, use a survey as a way to renegotiate a better deal.
For example, if a survey flags a structural problem in a property, you are perfectly within your rights to go back to the seller and renegotiate the price or ask them to carry out the repairs before contracts are exchanged. If need be, your conveyancer or property solicitor, specializing in conveyancing in Melbourne, can assist you with this part of the process.
Be prepared to walk away
During negotiations you should always make it known that you are prepared to walk away. This signals to the seller that you either have other options or that you’re not so taken with a property that you’re willing to pay over the odds for it. This may seem counterintuitive, especially if you’ve fallen in love with the property, but it actually puts you in a stronger bargaining position and can encourage the seller to be more realistic in their expectations.
Ultimately, when you’re negotiating a good deal on a house, how much you offer should align with your budget and what you’re comfortable paying. However, that doesn’t mean you can’t be tactical in your approach, either. Even in a tough housing market it’s possible to secure a good deal by looking at comparable properties and sales in the area, carefully assessing the property’s condition and better understanding the seller’s motivations.
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