From practising the art of silence to making an offer with your pre-approvals in order, a buyers agent shares their tips for negotiating the best possible price on your next property purchase.
It’s a delicate dance when it comes to selling a property. The seller wants as high an offer as possible, while the buyer wants to pay as little as they can. The trick to paying the lowest price possible boils down to sharpening your negotiating skills and brushing up on your knowledge of the local property market. Here’s how Rich Harvey, buyers agent, CEO and Founder of Propertybuyer.com.au suggests you negotiate like a pro.
“Supply and demand is a key factor when it comes to negotiating on price, and stock levels of similar properties in the immediate area determines this. If there are plenty of comparable properties available, there is far more wriggle room – buyers can simply move on to the next if the price is too high and sellers know this.” he says.
He recommends becoming a regular feature at local home opens to build an accurate picture of what stock is available. While you can do some research on your laptop, seeing properties in person means getting a proper look at the quality – web ads are designed to show the best features and the scale can be hard to gage.
A little extra legwork could reveal upcoming developments that may raise or drop the value of the property you plan to purchase; for example, nearby building approvals for high rises. This is one of many ways engaging a buyers agent can help you secure the best price – as well as having excellent knowledge of current and past stock, a good local buyers agent knows what’s coming onto the market before it even hits, Harvey says.
Buyers agents can also provide solid market predictions based on a range of factors, including what’s being built in the area, any new transport links, or general rumblings in the property market that may see prices move up or down. All of this combined can make for a powerful bargaining chip come price negotiation time.
Harvey recommends purchasing data sets – this can be done from websites including www.domain.com.au or your buyer’s agent will have this information handy. “These give you actual sales prices achieved, not just what’s being asked for properties,” he says.
Familiarise yourself with the data and bring it along with you when you’re negotiating price. Not only will it give you more confidence, it allows you to put across a factual argument.
“Part of a strong offer is making the agent feel you are ready to move ahead and can provide clear and prompt responses in the negotiating process,” Harvey says.
This means talking to your bank and having your loan pre approvals in place – a process that can take several weeks – so plan ahead.
Don’t be afraid to come in with an offer under the final amount you are willing to pay. If the agent says it’s a bit low, or the seller ‘probably won’t accept it’, this is not a no, so hold firm or use it as a negotiating point. Harvey says its important to remember the sellers agent is there to get them the highest sale price possible, and they will be engaging their own tactics to make you feel you need to bump up your offer. So, unless they expressly say your offer is not accepted, the offer is still in play.
At the end of the day, being able to stay strong when negotiating depends on your understanding of what the property is worth. Remember to leave your feelings and passion for the property out of it or you’ll end up losing perspective and pay more. And, if that’s your modus operandi, allow a buyers agent to do the negotiating for you and save yourself the emotion based price tag!
Words by Melanie Hearse
Keen to make some extra bucks by turning your investment property into a short term rental? Here’s what you need to know:
If you’ve thought about renting out your investment property for some extra money, you’re not alone. Since 2008, Airbnb has clocked in a whopping 150 million users across 190 different countries. And, it can also be a solid source of extra profit.
Before investing time or money into transforming your property, it pays to ensure you tick all the legal boxes. Phill Whyte from City Plan Planning says each State has their own specific requirements and legislation which must be approved first. Failing to measure up can result in considerable fines, not to mention the associated stress.
“It’s best to be proactive and get the relevant approvals in place from the start rather than let Council become aware of an unlawful activity that is already generating complaints and might compromise a potential application,” he says.
If you live in a building with a body corporate, it’s best to contact them seeking permission to rent out your space. Whyte says the majority of complaints come from neighbours or the manager of the complex in which the Airbnb is being undertaken .
The income you make through Airbnb is often subject to taxation, so check in with the Australian Taxation Office to ensure you keep the correct records and pay the right amount of tax. You may also be eligible for some tax deductions related to running your rental – including the money you spend getting your property set up and marketed.
And while Airbnb does provide insurance to renters using their platform, it’s important to read the fine print and ensure it covers you adequately. If not, talk to your home and contents insurer about potential policy adjustments to cover your rental comprehensively.
Before creating your makeover plan, log in and look at what is currently on offer in your area. This will give you an idea of what guests are looking for and what people are paying for similar properties. It also allows you to figure out what will make your property stand out from the rest – meaning you may be able to attract a premium price or higher occupancy rate.
Your location and size of your home will alter what people are looking for; if you’re near the beach, carpets and rugs will create additional work for guests, while an outdoor shower will help them keep the place clean with little effort. A small apartment is more likely to be booked by couples, meaning a luxurious and romantic fit out will be more appealing, while larger houses in family friendly locales will be looking for enough bathrooms, barbeque areas, separate living rooms, entertainment spaces and plenty of kitchen tools.
Neither last nor least, sign your property up with Airbnb, reading your contract carefully and asking questions about anything you don’t understand. It’s free to list, and they only charge an Airbnb service fee of around three percent once you have a booking. You’ll need pictures that show off your property (though avoid misleading snaps, they’ll only lead to disappointment and bad reviews) and a comprehensive lists of amenities and offerings – the more detail, the better!
Words by Melanie Hearse
Thinking of purchasing an investment property and turning it into a holiday rental? Speak to eChoice and get the pre-approval you need to start the property hunt.
It’s a sad fact that saving for a home deposit comes easier to some than others. Luckily, we spoke to someone with a knack for saving to throw the rest of us some top tips.
Nicholas from Western Sydney saved over $40,000 in a year while he lived out of home and supported himself on a low-average income. Oh, did we mention he’s 19?
Here’s what Nicholas of Aussie Money Man, shared on saving enough funds for a home deposit within a year.
It may sound obvious, but a lot of people give up on research because of the time and effort involved. But, Nicholas insists it’s all worth it.
“It’s a simple tip but I still say it first because it’s the most important: shop around,” he said. “When it comes to clothes, groceries – shopping at Aldi can be 60% cheaper than Woolworths and Coles – car insurance, literally everything, shopping around can save you a hell of a lot of money.”
It’s also worth double checking you’re getting the best deal on things like bank accounts and credit cards every few years.
To help with your research, sign up to e-newsletters, check coupon sites and read blogs and reviews to make sure you’re not losing out on quality just to save a buck.
Getting your priorities in order will allow you to have fun and maintain a social life without dipping into your savings.
“Basically, it comes down to your values,” Nicholas said. “If you value eating out with your friends once a week, then you should do that. But then you should probably cut out buying lunch every day by yourself if you don’t value that as much.”
“You do have to make sacrifices, but you don’t have to stop everything.”
Nicholas found that due to his age and income, he was eligible for a variety of government incentives and rebates. For instance, he took advantage of the government’s superannuation co-contribution deal where they matched his voluntary super contributions.
Even if you don’t think you’re eligible, it’s at least worth checking, Nicholas encouraged. On top of well-known incentives like energy rebates and first-home buyer grants, you might also find rebates for things like using tolls to getting new air conditioning.
If you struggle with discipline when it comes to saving, you may find one money mantra to really resonate with you: ‘out of sight, out of mind.’
This means that when your pay comes in, schedule it to immediately go to a savings account that you can’t touch. Nicholas guarantees this will help you stick to your goal and avoid temptation.
Nicholas suggested putting your money into shares, but this requires a bit of learning.
Dipping your toe into the share market can be daunting, but it’s certainly a skill worth gaining if you want to make the most of your finances. Ask for advice, start small and even if your money doesn’t work for you this year, you may strike gold eventually.
Another way is to check the interest rates on your savings accounts. It won’t save you bucket loads, but it’s worth making sure you’re not getting a raw deal.
Also, if you’ve been scrimping every dollar and have a decent whack of cash, pop it in a long-term savings account. The high interest rate – and inability to touch it – will help you get to that home deposit a lot quicker.
Words by Rebecca Mitchell .
Are you saving for your first home but aren’t sure what your next step should be? eChoice can help you get that all-important pre-approval sorted so you can submit your offer with confidence. We have access to hundreds of products, so we’ll find you a competitive rate.
The successful sale of your home depends on your real estate agent’s expertise. If you select an agent who is inexperienced, does not understand the market or who has a poor sales strategy, then your property may sit on the market without any interest for months. To avoid this problem, you need to find the right real estate agent for you.
There are hundreds of real estate agents in an area. Many of these agents profess to offer the best service at the most affordable price and will claim to know the location well. But the reality is many of these agents won’t be right for you and your property.
Use the Internet to familiarise yourself with local agents. Once you have a list of agent names, do a little online research to find out more about them. Many agents will have reviews and testimonials from previous clients. Based on your findings, create a shortlist of the agents best suited to you.
DO: Visit sites such as Realestate.com.au as these are another way for you to learn more about an agent.
DON’T: Rely on sites that claim to have the ‘Top 5 agents’ for your area listed, as agents pay for these services so they can be biased.
Once you’ve created a shortlist, it’s time to evaluate the agent. The easiest way to do this is to find open inspections hosted by the agent and to then visit these.
DO: Watch and interact with the agent. Pay close attention to their behaviour, level of communication and ability to answer questions.
DON’T: Mention you’re looking to sell your home. Instead, assume the role of a buyer rather than a seller. This approach gives you the opportunity to assess how comfortable you are with the agent, and what you think of their sales capabilities from a buyer’s perspective.
When you’ve narrowed down your agent shortlist to a handful, it’s time to contact each agent. Ask individual agents if they can visit your property to conduct a valuation.
DO: Test each agent’s local market knowledge at the valuation. Also, request the agent brings their local sales data so you can compare this to your property.
DON’T: Sign with an agent because their commission rate is lower than another agent. Instead, review your options in detail and compare all the facts.
When the agents on your shortlist call around to your home to value your property, they’ll make a ‘listing presentation’, which is the agent’s sales pitch. You should view this meeting as an interview, where the agent needs to impress you to gain your work.
During this sales presentation, the agent should discuss local sales data, how they will market your property, and how you can maximise price. Most agents will also discuss the best sales method for your property and project how long your property may take to sell based on its current appeal.
DO: Ask your agent as many questions as you can. You can then base your final agent selection on how they respond.
DON’T: Feel pressured to sign-up with an agent at the meeting. Remember they’re sales experts and selling your home is a big decision, so you need time to think.
By asking each agent a series of questions, you’ll be able to assess your level of comfort with each agent. Some great questions to ask an agent are:
When your agent answers these questions, evaluate their sincerity. Also, focus on their body language.
DO: Go by gut feeling during the meeting. If you feel any discomfort during the presentation, then this agent may not be right for you.
DON’T: Allow the agent to take control of the meeting. Instead, show confidence, listen to what the agent has to say and then steer the conversation towards your questions.
On the whole, take the time to contemplate your agent choices and your decision to sell. Just remember, you don’t have to make your mind up immediately. You can think about your decision, and you can discuss your options with family and friends if needed.
Choosing the right real estate agent needs to be based on fact. If you do background research, take the time to ask relevant questions, and evaluate agents, then you’ll find choosing someone to trust with the sale of your home with minimal effort.
Looking for the best agent to help sell your property? Once you’ve secured the sale, the right mortgage broker could make purchasing your next property easier. eChoice has access to hundreds of products across a panel of multiple lenders, so we can help you find a competitive mortgage.
Refinancing your home loan could be a great way to save money, but you need to time it right. You may decide to refinance as many times as you want, but knowing when to refinance your home loan is tricky. Firstly, while refinancing your home loan could save money, making the change needs precise timing. Move too soon, and you may incur more expense. Secondly, understanding your personal and financial situation and knowing the costs involved with refinancing, could also help you avoid costly mistakes. Let’s look at 7 ways to help you to decide if making a move to refinance is right for you now.
According to the Australian Competition & Consumer Commission (ACCC), some banks and lenders are overcharging their existing home loan borrowers by around 32 basis points more than new borrowers. Plus, the findings also reveal that there is little to no competition between these lenders to offer borrowers better rates. These standards have led to the ACCC chairman suggesting that Australians can benefit by switching lenders.
When it comes to home loans, many of us have a set and forget mindset. We take out a mortgage and then simply pay it off, rather than comparing it regularly to see if we’re still getting a competitive deal. Most financial experts advise that all home loan holders review their current interest rate a least once every two years to ensure they are still getting a competitive deal and that the loan still meets their needs. So, if your home loan is two or more years old, isn’t it about time you reviewed your current loan to see if now is the right time for you to refinance?
Mortgage research and rating groups suggest that there is over a 2.34% difference between the lowest and highest home loan interest rates on their databases. So, now could be the right time to review your home loan. Get started by comparing home loan rates.
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Many mortgages have penalty clauses in them, which means that you’ll incur a fee if you pay off the mortgage early. So, be sure to find out the following;
Because the amount of the fee could be large, it is necessary to examine your contract before proceeding with refinancing. Otherwise, it could end up costing you more than it is worth, which is a sign that now is not the time to refinance.
Over the years, the value of your home may have decreased. While you may have had a lot of equity a year or two ago, you may not have enough now to handle the new loan. For instance, if your home has decreased in value, then:
If the above statements are true, you may need to reconsider when to refinance.
Interest rates need to be lower than they are on your current mortgage. Many financial experts recommend that you discover when to refinance:
Knowing how long you intend to live in your home will also help determine when to refinance. So, ask yourself:
If you’ve said yes to these questions, then you know that now could be an appropriate time to refinance.
Many people think about getting a shorter term on their new mortgage. This option looks attractive, and it will help some people because it can:
When deciding on a time to refinance, you need to determine if you can afford the increased cost. If not, it may be best to shelve the plan.
Before buying into what appears to be an attractive deal on a home loan, take some time to calculate the total costs involved in refinancing your loan. Understanding these figures will help you to decide when to refinance your home loan. When crunching the numbers, it’s important to consider:
Do you know when to refinance your home loan? To answer this question, carefully consider your situation and then compare your existing home loan with other options on the market. Overall, selecting the right loan could potentially save you thousands and give you more financial freedom.
Are you looking to refinance your home loan and want to know if now is the right time for you? Then contact eChoice, our brokers can help you decide when to refinance your home loan. They can help you understand the charges involved and have in-depth knowledge across a range of lenders with access to 100’s of products. So, we’ll find you a competitive mortgage.