THE property market can be a delicate balancing act. In a booming property market, the scales tend to fall in favour of the seller.
THE property market can be a delicate balancing act. The seller wants to get the highest sale price while the buyer wants to get the most competitive purchase price.
And in a booming property market, the scales tend to fall in favour of the seller. As a homebuyer, this makes it important to know the subtleties of how to play the real estate game.
In order to secure your dream property at your dream price, there is a fine line between what you should tell the selling real estate agent and what you should keep to yourself, according to Queensland-based buyers agent Meighan Hetherington, director of Property Pursuit Buyers’ Agents.
“Say too much and it might be used against you in a negotiation,” Ms Hetherington told news.com.au. “Say too little and you may end up missing out on your dream home.”
So here are five things a homebuyer should NOT tell the selling real estate agent when in the market for a new home.
Don’t reveal your budget
You might think keeping something as important as your price limit a secret is counter-productive. If the real estate agent doesn’t know exactly how much you can afford, how can they find you your perfect property? But being too specific about your budget can give the real estate agent too much power, Ms Hetherington warned.
“It is important to be careful with how you frame your answer to the question “what is your budget?”
“Under-pitch and the agent won’t tell you about higher priced properties. Over-pitch and they will use that information during negotiations.”
But that doesn’t mean you shouldn’t give the selling agent anything to work with. The best way to handle the budget question is to give a healthy price range.
“Let’s say your budget is $1,600,000. The best response is to ask them to talk to you about all the properties that are in the mid to high $1 million range. That way you will get access to properties above and below your budget.”
Don’t be specific about timing
If you have a deadline to meet, such as the settlement of your own property, you should not reveal this to the agent during your search.
“It makes you a target for emotional pressure during negotiations,” Ms Hetherington told news.com.au.
“Instead, be prepared to rent if you don’t find the perfect home in the right time frame. That way, you won’t feel pressured to make a poor choice or pay too much just to solve what is a short-term problem.”
Don’t reveal too much personal information
Again, revealing too much personal information about yourself can make you a target for emotional pressure, Ms Hetherington has warned.
“A real estate agent needs to establish if you have the financial capacity to buy the property that they are selling, but they should not know too much about your family structure, what schools your children go to, who you work for or what you do.
“There may be a beneficial time to reveal some of these aspects during a negotiation, but not during your search.”
Don’t give price feedback
Ever walked around an open home with no price guide and commented on what you think the property is worth? That is a big no-no. Never, ever give offhand feedback about price.
“If you are too high, the agent will grab you with both hands and get every cent out of you. Too low and they won’t take you seriously,” Ms Hetherington said.
Instead, you should identify a couple of comparable sales and discuss the superior and inferior aspects with the agent.
“With this approach you are likely to get a lot more information from the agent about where they think the price range should be.”
Never tell an agent you are ‘not interested’ in a property if you are
The real estate game isn’t like the dating game, so don’t play hard to get. Feigning lack of interest could potentially mean you lose your dream home.
“I once heard a buyer blow up at an agent because a property sold prior to auction and the agent had not contacted the buyer to see if they wanted to buy it,” Ms Hetherington told news.com.au.
“Thinking they were outsmarting the agent, they had made the mistake of not returning the agent’s phone calls after their inspection of the property. They thought they would do all of their research and turn up on auction day to bid, without having to talk to the agent. Big mistake.” While the selling agent is working in the interests of the vendor, they aren’t your enemy. A big part of making the vendor happy is ensuring the buyer is the right person for the home — and that makes them hugely helpful to you too.
“How can you possibly be sure that you have uncovered all of the background information about the property if you haven’t spoken to the agent?” Ms Hetherington said.
“One way of informing the agent that you are interested without revealing your price position is to say that you are interested at the right price.”