With the participation rate of first home buyers increasing in the economy and record low interest rates its worth a reminder to anyone purchasing a property that the bidding process is in 2 parts. The status quo, especially for first home buyers, is to make offers on a property in line with your motivation to buy. This motivation changes from one property to the next as some may need work or have better locations; either way, most properties will vary in value depending on the motivation of the buyer.
For many, buying a home is something you will only do a few times in your life and it’s a very large financial decision for the inexperienced. For many professional real estate investors, the buying process is broken down into two simple questions.
“What is the lowest price the vendor is prepared to take; and am I prepared to pay that?”
The first part of the question is the most critical. What many are concerned about is that their own estimate of the properties worth maybe higher than what the vendor is prepared to take. Making a low offer, substantially below what you are prepared to pay, is a way of testing the vendors motivation. It’s important to realise that vendors motivation can be different and some may need to sell quickly, at a price, or some make be off on cloud 9 and wanting much higher than what you are prepared to pay.
The main thing here is to make sure the vendors lowest price has been determined and quite often this process results in the buyer getting the property for a lower price than they expected.
There are a few additional points that go a long way to put pressure on your vendor and you should consider advising the Real Estate Agent on the following.
All clients are offered a complimentary pre-approval at no charge before getting into the property market. If you are thinking of buying sometime in the near future call us on 07 40579746 to arrange a pre-approval and get access to our free online valuations.
With over 20 years experience in Home Loan Lending and Financial Planning, You can feel confident Cairns Mortgage Brokers will get you the best deal on the market. Call us today: 4057 9746