Get Pre-Approved - Not Pre-Qualified
Do you want to get the best property you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the settlement time period is critical to the seller.
We always recommend that buyers get "pre-qualified" by a lender. This means that you spend a few minutes on the phone with a lender that asks you a few questions. Based on the answers, the lender can advise you that you are "pre-qualified." This information can be useful to a seller if a buyer can advise them of whom they spoke to and when. Whilst sellers understand that pre-qualification is not guaranteed, it can strengthen your offer.
The way to make the strongest offer today is to get "pre-approved." This happens AFTER all information has been checked and verified by a lending institution. You are actually APPROVED for the loan and only loose ends such as a valuation on the property are required to be completed. This process can take anywhere from a few days to a few weeks depending on your situation. Pre-approval is a very powerful negotiating weapon, we recommend all our clients have it in their arsenal.
Sell Your Property First, Then Go Shopping
If you have a house to sell, consider selling it before selecting a house to buy! "Subject to sale" contracts aren't nearly as strong as one that comes in with a ready, willing and able buyer. Consider this scenario. You've found the perfect house - now you have to go to make an offer to the seller. In this situation you want the seller to wait for you to sell your house, they may agree to do so, subject to a 48 hour clause or sell at a higher price as compensation for taking their home off the market.
You run the risk of missing out or having to consider bridging finance if another buyer comes in and the 48 hour clause is invoked.
If you have sold already, you're in the box seat, cashed up, ready to negotiate. Is this a better option than slashing the price of your home to try and secure the next one?
Don't Be Pushed - But Be Prepared To Act FAST!
It is best not to make a decision until you feel that you have seen enough of the current stock on the market and done your research. Look into school zonings, transport routes and local amenities. BUT, in today's sellers market, the number of buyers vastly outweighs the number of properties for sale.
A big mistake we see buyers often making is they find something they really like, want to see other homes and by the time they decided the first choice was right, the home is sold. In a sellers market, there aren't not enough homes to satisfy every homebuyer. Homebuyers typically then have to make fast offers - often above the asking price or risk losing the home to a more agile buyer. There isn't too much room to negotiate in a sellers market unless the property is overpriced. If you see something you like, you can afford it, buy it. Experienced or not, in a sellers market, you must be willing to act fast.