When it comes to home buying mistakes, I’ve observed just about every one there is. Some examples are; letting a great home slip through your fingers because of indecision; putting agents and vendors offside; getting emotional; being too influenced by a computer-generated data report, and taking advice from well-meaning but ill-informed friends and family.
Although a poker face is an asset when dealing with an agent, a negotiation is also all about honesty and building a relationship. Sometimes there is a lot going on behind the scenes and it is important to give away information as well as gather what is important for yourself. It helps to find out if the seller is experiencing one of the four D’s: death, divorce, debt or downsizing.
When it comes to negotiating you need to detach yourself emotionally from the process. Put all of your offers in writing and stick to the facts. At the same time, let the selling agent see that you are serious but not over-enthusiastic. Be prepared to help them do their job. After all, an agent just wants to get the deal done and move on. Try to get the agent on your side so he encourages the vendor to accept your offer.
Here are some common buying mistakes to avoid when purchasing property:
Don’t disclose your budget
Sure you will be giving them a rough guide based on the types of properties you’re inspecting but once they know your real budget, a good selling agent will do everything they can to extract every cent out of you, especially if they haven’t reached the reserve at auction or the vendor’s bottom line yet.
It is good to let the vendor know that you appreciate the property. Many sellers are emotional about the home and want to see it go to a new occupant who appreciates it. But don’t show your hand too much and be a pushover. If you fall in love with the home, the selling agent will use it to their advantage when it comes time to negotiate on price.
Don’t make a silly low offer
I get this all the time from new clients. They think it is clever to come in really low to negotiate at a good price. If you come in too low with your first offer and have too many conditions then you risk alienating the vendor and the selling agent or having them think you’re a time waster. If you are going to come in low, you need to attach recent comparable sales that will justify this offer. Otherwise, you will look foolish and get the negotiation off to a bad start.
Even after all the times I have been in negotiations, there is still the desire to get it over with. The temptation to rush ahead and make offer and counteroffer is intense. Stay calm, time it right and hold the tension. Just like making sure you don’t send an email out in anger. Wait, relax, sleep on it. An agent will often say there are other potential bidders, and there probably are, but don’t let that fluster you. Always say you need to talk it over with your partner, adviser, broker, etc.
Never make a fed-up purchase
After looking for a property for a couple of months or missing out on buying a few homes frustration naturally sets in. Some people get so fed up that they end up buying a property they never would have a few weeks earlier or paying a price they never needed to in order to buy the one they did just to end the frustration. The problem is it won’t be long before they’ll regret it and want to sell and buy again which will cost around 10 percent of the purchase price in selling and buying costs not to mention the emotional and wasted time cost. It’s very expensive to get it wrong and if you’re at that stage it would be a wise investment, and far less expensive and stressful, to get some professional help from an experienced buyer’s agent.
Learn how to manage compromises
Its very rare you get to find your “PERFECT” place. It does happen, but it is rare. Too many people set a high bar and don’t learn to manage compromises. A good buyers agent can help you see beyond a place that is not perfect but can be made to work. Many people need help to understand what is a deal breaker and what is fixable.