You found one, Now what?

Negotiation Tips

Vendors
Offering conditions that are attractive to the Vendor may encourage them to accept your offer over someone else’s, or to accept a lower price than they originally wanted. For example, if they are buying something else it may be advantageous to them for you to release the deposit to them after exchange, or offering a deposit higher than the standard 10% may appeal. A fast settlement may be attractive, or maybe a long settlement may appeal – even the ability to lease the property back for a period of time might sway them in your direction. Maybe they want to keep the light fittings or favourite shrubs out of the garden. You also need to remove as many conditions from your offer as possible. Making an offer subject to finance or subject to the sale of your home is not as attractive as an unconditional offer. Always remember to seek legal advice before committing to any special conditions.

Agents

Keep in mind that the selling agent is working for the vendor, who expects the agent to achieve the highest possible price. Make sure you seek independent advice and do your research. You also have the option of employing a ‘buyers agent’ to find the right property or just negotiate on your behalf.

 

Check It Out

Gazumping
If you are in a rising market or in an area of low supply & high demand – you might find yourself being gazumped. That is another buyer submitting a higher offer AFTER your offer has been accepted. The owner is legally within their rights to do this, so the onus is on you to move quickly. If you are concerned, discuss with your agent the possibility of paying a 0.25% deposit for the right to a cooling off period. The owner retains your 0.25% should you not proceed, however, depending on the market conditions it may be worth your consideration. The standard cooling off period is 5 days, however it is worth noting that if you are borrowing more than 80% of the purchase price, the bank will take longer than 5 days to approve your loan, so ensure you negotiate a cooling off period of 10 days.

Reports
The tough part about buying property is often the fact that you are trying to hold onto every cent you can. In that context, a building report or a pest report costing a few hundred dollars can seem like a big impost, particularly if they come back with news that means you wouldn’t buy the house! Be very careful of not getting these basic reports done. They can tell you important facts that in the long run can save you heartache and many thousands of dollars. If you are buying an apartment make sure you check the strata reports, see how much is in the sinking fund and what work they have planned. The last thing you need is an unexpected Special Levy to arrive just after you settle.

Check 1-2!
Make sure you check out survey reports to ensure that all buildings and fences on the property are actually built on your land. Also, contact the local council and the RTA and see whether there are any major roads, freeways or other significant infrastructure projects planned for the area which may affect your property – or even run through the middle of your home!

Saving money – or buying trouble?
Unless you really know what you are doing, it pays to pay a professional to do your conveyancing. Too much can go wrong – and that just adds to the stress, which you don’t need.
And don’t forget … to take advantage of any incentives the current government may be offering if you are entitled to it!

 

Investment Tip

Knowing the ‘hood.
We’ve heard a story of a couple who bought an innerwest property at a bargain price, only to discover upon moving in that the local chapter of a very large and very noisy motorcycle club were the tenants of the harmless looking warehouse building over the back fence. Open inspections are often organised for the quietest times of day. Peak hour road noise can often change the nature of a location entirely – let alone bikie neighbours. Visit the house at different times of day and night, and also over the weekends.