Spring is here, and you’re ready to hit the property market.
But before you begin, there are a few things you can do to ease some of the stress of buying, and ensure your offer gets accepted first time.
Show them the money
Home loan specialist Camille Lewis says the earlier you begin the process of approval for your home loan, the better.
“We highly recommend getting pre-approval before you even start your property search to confirm your absolute maximum price – so you don’t fall in love with a property that’s out of your reach,” says Lewis, of Domain Loan Finder.
This message is especially important now with banks tightening their lending policies because of the Financial Services Royal Commission, she says.
“Gaining pre-approval can reduce the risk of issues during the settlement stage. If you’ve jumped the gun and made an offer, you risk not meeting the finance clause and potentially losing your deposit.”
The level is in the detail
With lenders exercising more due diligence, Lewis says be armed with as much detail as possible, particularly about your living expenses. Where lenders were previously satisfied to make estimations on outgoings, they now want to see documented proof of spending.
“Obviously, make sure your pay slips are up to date, but most importantly, carefully review all your expenses before your appointment [with your loan specialist],” Lewis says.
Knowledge is power
Wakelin Property Advisory director Jarrod McCabe says you should do as much research on comparable sales and offerings in the area as possible so you “know where value sits”.
“Know what competition [for the property] is on the market which you can always cite [to the agents] as an alternative to the place you’re looking at,” he says.
Let’s get this straight
McCabe also recommends establishing the “rules of engagement”, which will influence your offer. Will the agent simply go back and forth, hold a boardroom auction or is it a best-foot-forward situation?
“Asking the question and getting a clear understanding of their preferred process is really important.”
Keeping it real
Victorian general manager for The Agency and award-winning auctioneer Peter Kakos recommends supporting your offer with genuine reasons how you arrived at that figure. This “helps the agent create some context to the owner when they present your offer”.
“It makes it just that little bit more ‘real’.”
Too low – off you go
In a softer market, buyers may be tempted to be bolder and put in a lower offer. But Kakos warns against getting a vendor’s back up.
“Low-balling may offend a vendor and result in the owner becoming reluctant to negotiate off their price at all,” he says. “At the very least, you would like a counter-offer to start a negotiation process.”
Not too shy, now
Make your intentions clear, otherwise the agent may not come back to you if the vendor gets what they consider a good enough offer.
“There’s a fine line between not seeming too eager and making it clear you want to be kept in the loop,” McCabe says.
And too often, buyers don’t ask the obvious question: “Just ask them: ‘what will buy this property?'”
The path of least resistance
The fewer conditions attached to your offer the better.
“Get your pre-approval sorted and know your limit. Making it subject to finance significantly weakens your offer, particularly if you are competing with another buyer,” Kakos says.
McCabe recommends buyers speak to the agent first about the vendor’s ideal settlement terms, ideal deposit and to not be tempted to try include too much in the offer, such as chattels that may have appealed to you.