Avoid the overpaying trap

Author: ME

Published at: 6/21/2016 3:29:32 PM


Avoid The Overpaying Trap



All first home buyers share one common goal: to buy at a good price and avoid getting ripped off. But it’s easy to blow the budget on your first home, and throw the rulebook out the window at the eleventh hour.


In a rising market you may feel a sense of pressure to ‘buy now’ before prices climb. Or it can be tempting to buy with your heart rather than your head.


However there is one major reason why buyers can overstep their budget. And it all boils down to not having a firm grasp on what a property is really worth.


What you believe to be a fair price for a place can turn out to be way over the odds. And given today’s property values, even a small overestimation can mean wasting tens of thousands of dollars on a high-ball offer.


Taking a few extra steps can help you nail price negotiations and hit the mark to pay market value – not a cent more.


Invest in some research


The key to value buying is thoroughly researching the area you are looking at. Don’t buy into the hype – stick to the facts. There are plenty of real estate websites featuring median values for individual suburbs. Or consider subscribing to property data services like those offered by, say, CoreLogic or APM.


Hit the streets – it pays off


Ultimately, paying the right price for your first home can come down to wearing out some shoe leather. There’s nothing like investing time checking out a wide range of properties to get a true feel for where the market is at. Ask agents how long a property has been listed for. If the ‘For sale’ sign is looking a little weathered it’s a far bet it’s priced above market value providing an open door for price negotiations.


Test the waters


Make an offer based on what you believe is the property’s real value not the list price. If you’ve been keeping an eye on recent sales in the area you should have strong data to use as ammunition. Don’t be embarrassed about trying to knock a few thousand off the price. You don’t ask, you don’t get.


Demonstrate some fire power


Have loan pre - approval in place before you make an offer - and let the listing agent know you’re good to go at a moment’s notice. The selling agent will be keen to secure a sale (no sale = no commission) and a buyer with finance is more likely to be seen as a sure thing. Speak with ME Mobile Banker about lining up home loan pre-approval to give your price negotiations genuine clout.