The spring sales season is well and truly here, but what do rising interest rates mean for this traditionally busy period?
The pandemic’s peak profit-making period has now officially passed, with property prices still falling across much of the country.
However, with rapidly rising interest rates cutting the average Australian’s buying power by 20 percent, it’s important to understand how to negotiate like a pro when it comes to your spring property purchase. Here are our top tips.
Tip 1: Do your research
You’ll be in a better position to make an offer or bid with confidence if your local property market knowledge is up to speed.
We have access to a range of reports that will help you cover your bases. Whether you’re interested in the latest suburb data, or an estimated valuation of a property, get in touch to find out how we can support your research.
Hint: CoreLogic’s weekly Auction Market Previews are a handy resource. They will help you keep your finger on the pulse during rapidly changing market conditions.
Tip 2: Get your finances in order
If you do find a bargain, you’ll want to be in a position to jump on it. Speak to us about organising pre-approval on your finance, so that you’re ready to go.
Pre-approval means a bank has agreed, in principle, to lend you a certain amount of money. Having pre-approval gives you confidence during price negotiations with vendors. It may also give you an edge over other buyers without pre-approved finance.
Tip 3: Find out why the vendor is selling
Understanding the vendor’s motivation to sell may give you an upper hand during negotiations. What type of settlement terms and deposits will be most attractive to them?
They may be moving interstate, or need liquidity fast, in which case they may drop their price for a shorter settlement.
Maybe they need an extra-long settlement while they find somewhere else to live?
Or perhaps a larger deposit would make you more favourable compared to other buyers?
Ask the real estate agent why the vendor is selling and use the information as a negotiation tool.
Tip 4: Get building and pest inspections done
Building and pest inspections not only alert you to issues with the property such as termites and structural defects, they can also be used as ammo during price negotiations. You may be able to use the findings from the inspection to negotiate a lower sale price.
Talk to us
Property prices are falling in many markets and there are plenty of opportunities out there for savvy buyers. Get in touch today to organise pre-approval on your finance and be ready to buy.
Disclaimer: Please note that the examples mentioned are indicative only, and outcomes will depend on your financial situation. It’s best to discuss this with your mortgage broker.
I’m Your Mortgage Coach and I’m here to help you achieve your lending goals.