5 ways to buy your home before a property auction
When looking to buy a home that you really want, sometimes emotions can get in the way and nowhere is this more apparent than at a property auction. For this reason, some prospective homeowners may want to clinch the deal before auction day.
Here are some top tips for keeping your cool when you’re involved in some hot negotiations
Get started early
Inspect the property as early on in the sales campaign as possible and request a contract of sale from the selling agent.
If the agent receives an offer from another buyer, usually the agent will contact all the contract holders allowing them the opportunity to make an offer or be kept updated with the negotiations.
The agent won’t contact every buyer, just the buyers that have made themselves known by asking for a contract or making an offer.
Give you agent some background
If you have previously made offers on other properties or bid at auction recently then let the agent know. The agent will then know you’re 100% ready to buy.
They may have another property coming to market soon, which they will only tell their qualified buyers about. A qualified buyer in an agent’s opinion is someone who has their finance inline and has already missed out on a couple of properties.
A proactive agent will usually be working with five or 10 qualified buyers at any one time and it’s be a good idea to be on that list so you can be notified of properties that most of the market won’t find out about.
Keep in mind that you don’t want to give away too much to the agent. Common question agents will ask buyers who have just missed out on a property are “what did you bid up too?” Or “what was your offer?” or “what would you have paid?”
But answering these, will give away your negotiating power, so all the agent needs to know is that you were in the running for a similar property and just missed out and you’re ready to move forward on another now.
Get the price right
Offer a price that is close to your walk-away figure. Vendors will only entertain the idea of selling prior if a premium price is put forward. As with all negotiations, the vendors will assume your first offer isn’t your best so leave some wiggle room.
Go beyond words
Verbal offers are taken seriously, but not as serious as an unconditional offer. An unconditional offer is an offer on a contract, 10% deposit and 66w certificate.
A 66w certificate waives your right to a cooling off and your conveyancer will prepare this for you. If you make an unconditional offer all your due diligence will need to be complete beforehand.
Be left of centre
Offering odd amounts is a great tactic especially after making a couple of lower offers. For example, rather than offering $1,200,000 or $1,250,000, offer $1,255,500. An odd amount suggests there’s some logic to your offer and it also implies that you’re at your financial limit.
If you want the convenience of not having to do all the work yourself when it comes to negotiating a better deal on your home loan try the LoanDolphin platform which allows banks and mortgage brokers to fight for your home loan for free. Click here to get started.