Imagine that you are looking to buy a property and it’s your first time doing so.
You’ve read pretty much all guides and tips for first-time buyers, and you’re feeling confident that things will go smoothly. And after a seemingly endless search, you’ve finally found your ‘dream home’. There is but one problem though — you’re not the only who wants to buy that property.
All of a sudden, you feel as though all your preparations were for nought. You’re probably even thinking that making the highest offer will guarantee that you’ll get the property and that’s entirely true. However, buying a sought-after property is not always about the highest bidder.
In fact, here are tried and tested ways that you can get to the front of the buyers’ line regardless if you are a first-timer or not.
A property chain is a situation where buyers and sellers are linked together because each one is buying and selling at the same time. Basically, each party involved in the chain is dependent on the buying and selling of the other properties in the chain — the more parties involved in the chain, the higher the chance that completion will take longer.
Obviously, you don’t need to worry about a property chain if you are a first-time buyer. Additionally, a new build property is also chain-free. It can potentially be a problem though if you are part of a property chain and the property that you want isn’t.
What you have to understand is that a seller will almost always want completion to be quicker. And considering that there are a lot of other buyers who want the same property that you do, this puts you at a huge disadvantage. The good news? There are ways that you can break the property chain.
There are a lot of steps in the home buying process, but before anything else, you have to make sure that you sort out your finances first. After all, it only makes sense that sellers will prefer buyers who have good financial standings. That said, it goes without saying that cash buyers are in very favourable positions in the eyes of sellers.
If your finances are all over the place, buyers will see you as a risk which will make your offer very unlikely to be accepted. It is highly advisable to get yourself pre-approved for a mortgage. This will show sellers that you are financially capable of purchasing a property and removes any doubts in their minds.
A loan pre-approval will help a lot to portray that you are a serious buyer — someone who is able to satisfy all the aspects of the purchase. Always expect that you will be competing with multiple buyers for the same property and it’s a war out there. A mortgage pre-approval will be one of your strongest weapons.
There are a lot of myths that float around the world of real estate. One of which is that all real estate agents are the same and the other is that they’ll do anything to get a sale. Because of these ‘myths’, many people think that working with estate agents is just a waste of money which prompts them to work on their own.
While there were definitely instances when agents did not live up to what’s expected of them, there are way more good agents than bad ones. And if you are eyeing a sought-after property, it is important to work with professional real estate agents only.
If a good financial standing is your greatest weapon in this ‘war’, then estate agents by your side are like your shields. For starters, they will be able to give you a heads up when there are great properties that are about to be in the market. Second, they will take a lot of work off of your back like looking for a home, contacting sellers, setting up appointments, viewings, etc.
An estate agent also has a lot of connections, and when you are friends with them, you can potentially take advantage of those connections. Good lenders, home inspectors, contractors, and other real estate contracts — an agent can certainly help you with a lot of things.
As much as you can rely on an estate agent to do most of the work for you, introducing yourself to the seller is not a bad idea either. This does not mean that you should pry into the seller’s personal life to get on their good side. Doing so will actually have the opposite effect.
Try to understand what the seller is feeling about selling their home. If the seller has lived in the property for a very long time, selling it can be pretty emotional for them. Not only did they spend a lot of money on it, but they’ve most likely become attached to it as well over the years.
So if you happen to meet the seller during a viewing, see to it that you introduce yourself properly to them. Compliment their home and talk about the things that you especially like about the property. Reassure them that you will take care of their property so they’ll feel comfortable about you.
Under normal circumstances, you’d like to start on a low offer. However, it’s an entirely different case when you are buying a property in a very competitive market. If there are a lot of buyers interested in a property, it’s more appropriate to offer the seller’s asking price. Better yet, offer an amount that is higher.
But still, see to it that you stay within your budget. Do some research first about the homes that are being sold for in the area. This should help you determine the market value of the property you are interested in. Always make the highest offer that you can but make sure that it’s not beyond what you have. Again, this only applies if you’re buying a sought-after property.
But when you do make your offer, always let the estate agent know that it’s subject to the property being taken out of the market. This should significantly reduce the risks of you being ‘gazumped’ — vendor backing out of your offer because of a higher bid from someone else.
Estate agents are not legally obliged to comply with this condition though, but it’s okay if they do in your case. You can also offer a small deposit to show your commitment that you really want the property. This can provide the seller with the added assurance that the sale will go through without any hassle.
And that’s a wrap for today’s tips on buying a sought-after property. In summary, all the tips provided in this guide are for you to show a seller just how serious of a buyer you are. As mentioned earlier, there’s a lot to buying a property than just money.
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