The biggest fear for every seller is that they will undersell their property. On the reverse, every buyer is afraid that they might pay too much for a property. In a market like this – the chances of paying too much are high. Many people don’t worry too much about that, because they are getting the property they want and even if they pay a little over the odds, time will take care of that. Mmmmm – not sure that I agree with that but if that is how you rationalize it – so be it.
But if you are concerned about paying too much, here are some measures you should take to ensure you don’t overpay for a property? Firstly – Find out how quickly listings are selling. Ask the agent to prepare a market analysis for you and concentrate on the most recent sales of properties that compare to the one you are looking at.
Days on market – that is the time it takes to sell a property – and the discount levels are two very important market indicators. Both are freely available on the internet. Stay within your financial comfort zone, so make sure you know how far your finances will stretch. That means getting pre-approved for your loan. Carefully look at your financial situation now. Interest rates might not come down much more, so make sure that you comfortable with the size and kind of mortgage you use.
Don’t overpay and hope that a couple of month’s worth of appreciation will make up the difference. Make sure your offer includes a building and pest inspection even if you find yourself in competition. The report you get back is likely to highlight some defects. Don’t let that put you off but instead use it as a lever to re-negotiate the price to allow you to fix any problems.
Don’t let the threat of multiple offers scare you off. Rather look at it as confirmation that your decision to buy that particular property was a good one because other buyers can see the value as well. Give it a shot but stick to your price limit. Don’t walk away just because the seller gives you a counter offer for a higher price. Counter back even if it’s at the same price. Control your own negotiations by controlling your emotions.