The purchase of a home is often the biggest financial commitment that a person makes; yet it is surprising how many buyers go into such transactions with minimal preparation and without the information that will enable them to negotiate a satisfactory price.
"As a start, the potential buyer should find out all he can about the property he is intending to buy. He must then familiarise himself with the prices of homes in the same area that are comparable in size, quality and features," says Tony Clarke, managing director of the Rawson Property Group.
Once the price structure of the homes in the area has been understood by the potential buyer, he should try to find out why the seller is moving. "This information can greatly strengthen the buyer's negotiating powers. If, for example, he knows that the seller has to move soon to another town to take on a new job or if he knows the seller needs cash urgently, the buyer's bargaining position can be greatly strengthened. Similarly, if the house is tenanted and the seller knows when the lease will expire, this information may enable him to negotiate a better price."
Find out about developments
Clarke advises buyers to check the zoning of the property they are contemplating buying and to make diligent enquiries as to whether major developments are likely to take place. If this is the case, the exact nature and size should be clarified. Enquiries should also be made to find out if the local authorities have plans for the development of amenities in the area. New developments and amenities can be either beneficial or detrimental to property values.
"One of the discernible trends to become evident in the downturn has been that certain niche markets have the ability to maintain their value to a greater or lesser degree. Although scepticism is always advisable, if an agent claims that his area is outperforming others, this may well be true - and such areas tend to be highly suitable for investment," he adds.
Offer must be realistic
Once the buyer has decided to make an offer for a home, he should not overplay his hand and the first offer must therefore be realistic. Where more than one buyer is interested in purchasing a property, the seller and his agent can sometimes push them both to raise their prices. In these cases the buyer should know before he starts his bidding just how high he can go and should not go above this limit.
If, however, he wants the house desperately and the seller for one or another reason refuses to accept his offers, it may be possible to negotiate a deal in which the seller's price is accepted on condition that a range of improvements such as repainting, retiling or a garden improvement is undertaken by the seller at his cost and within a specified time.
*Taken from Bizcommunity with permission from Rawson’s.