The listed price of a home is just a suggestion. It is what the homeowner thinks his or her property is worth. In Australia, the average accepted offer is 10% below the initial asking price. With many buyers paying 10% deposit for a home you can see that would be a significant saving.
When making your first offer on a home, consider the following details to present the seller with a reasonable offer.
Estimated Value and Previous Sales History
Examining the previous sales and rental history helps you determine how long the current owner has occupied the home and how long it has been listed. When a home sits on the market for a long time, sellers are often more willing to accept a lower offer. You can also obtain general statistics on rent and sale’s from the Government if you are looking to invest in real estate.
Along with the sales and rental history, you should obtain the latest price estimate of the property. You can discover this information today by getting a free property report from Lendi.
Your detailed property report may also include the year the home was built and the condition of the property. Once you have studied a few property reports you start to understand the benefits the neighbourhood has and will have in the future. Gathering these details will help you create a potential offer that you can work with as you explore a few additional factors.
Information about the Local Neighbourhood
Finding the right home requires you to research the neighbourhood. You may want to consider the commuting distance to work, the quality of the school systems, the crime statistics, and local features or amenities.
You should also research the selling price of other homes in the neighbourhood. The homes that have been sold in the past six months provide a market value range for determining your offer. If the asking price is at the low end of this range, you may not have a lot of room to negotiate a lower offer.
The price estimate, sales history, and the local market value range provide a better picture of whether the asking price is at the high or low end of the spectrum.
Existing Damage to the Property and Repairs
During the home buying process, your conveyancer or solicitor should arrange an inspection of the property. The inspection is a detailed look at the condition of the home and any existing damage. It is advised to check your inspector with their previous work to make sure you get the best person for the task.
Certain types of damage may impact the overall value of the property and your potential offer, especially if the damage still requires repair.
Keep in mind that most properties require minor repairs. However, the significant damage that still needs to be addressed may give you a reason to negotiate a lower price.
Recent Property Renovations and Additions
When you review a property report, the estimate that you see may not include the most recent renovations. If the homeowner has completed an addition early in the year, the extra square footage may not be reflected in the estimated value. These details should be uncovered during an inspection and when discussing the property with the seller.
In the end, making an offer on a home requires a lot of research. However, this research is worth the effort, considering the amount of money involved in the transaction. Take the time to review the criteria discussed before making your first offer on a home and never feel pressured into committing until you are satisfied it suits your needs.