We all want to get a bargain when we buy a property, however, the reality is that you need to meet the vendor halfway in most cases. Knowing how much you should offer and exactly where you need to meet the vendor when it comes to price comes down to asking a few key questions.
What’s the basis for the asking price?
Just because a house is listed at a certain price by the sales agent doesn’t mean the price is a realistic one.
The key to understanding whether a price is fair and reasonable is to do your market research beforehand.
These days it’s easy to access sales data on the real estate portals and you can quickly and easily see what other comparable properties have been selling for in the same area.
Try and find a house of similar age, land component and condition that has sold in the last three to six months, and present those to the agent when making an offer.
Are there multiple offers?
If you’re the only one putting an offer in on a property, then there is a fair chance you’ll be able to negotiate a lower price.
If there are multiple parties interested then the odds of you getting a bargain are slim.
At the end of the day, buying and selling is about supply and demand and if you need to compete for a property, then you likely won’t be able to put in a low ball offer successfully.
How long has the property been listed?
If a property has been sitting on realeaste.com.au for six months with no interest then there is a fair chance the property is overpriced.
At that point, the vendor might be willing to accept something less then they had previously hoped for and meet the market’s expectation.
If they aren’t then it’s likely that they are simply asking too much and are not prepared to budge.
What’s the vendor’s motivation?
How eager is the vendor to get a deal done? If they need to sell the property quickly for family or financial reasons, then you might be able to put in a lower offer with good terms.
If the vendor has a set price in mind and no reason to sell, then there is not much chance of getting a low offer through.
Has the asking price changed?
If the asking price is slowly dropping each week or month, then it’s fair to say that the property was initially priced too high, either by the agent or the vendor.
This also shows the vendor does want to sell and that they are prepared to be flexible on what they accept.
In this case, a low offer might be something that the vendor is prepared to consider.
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