Buying a home can be a challenging journey, especially if you’re a first-time buyer. Picture: Tierra Mallorca / Unsplash
Starting your journey to homeownership can be exciting, but it also comes with its fair share of challenges, especially when it comes to matters such as negotiation which is crucial for securing the best possible deal on your dream home.
Arnold Maritz, co-principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs and False Bay said: “Negotiating your first home purchase requires a combination of preparation, strategy, and a level of flexibility.
“It’s also important to remember that negotiation is a two-way street and it's essential to strike a balance between getting the best deal and maintaining a positive relationship with the seller.”
Maritz shares tips to help first-time buyers negotiate the fairest deal:
Before starting the negotiations, you need to research the market and compare properties in the area. By understanding the going rates, you will have a solid foundation for your negotiation strategy.
According to Maritz, setting a realistic budget is essential and people need to be clear about your financial constraints.
Knowing your limits ensures that you don't overcommit and end up with a property that can be a financial burden. When working out the costs, you should also include addition monthly costs such as rates, taxes and building insurance.
Maritz said that negotiations can take time, and so it's crucial that people be patient.
“Be open to compromise and find common ground with the seller. Flexibility can lead to a more favourable outcome for both parties,” Maritz said.
If you are still unsure after doing your homework and setting your budget, then you should consider hiring a real estate agent to guide you through the negotiation process.
Agents that have experience in estate have insights into market trends and can offer you valuable advice on crafting a competitive offer.
When crafting a compelling offer, you need to take into consideration various key factors that can influence the outcome:
– Property condition: The condition of the property can impact its value. If the property is older, consider hiring a home inspector to assess any potential issues and use the findings to negotiate repairs or a reduction in the purchase price.
– Market trends: Stay informed about the current real estate market trends in South Africa and also the area in which you want to buy.
– Seller's motivation: Understanding the seller's motivation can give you an advantage in negotiations. If the seller is motivated to close the deal quickly, you may have more room to negotiate on price or other terms.
– Local amenities and infrastructure: Proximity to schools, public transportation, and shopping centres can affect the property's value and should be included into your negotiation strategy.
The offer process is a crucial stage in the negotiation journey, so you need to navigate it effectively:
– Craft a strong offer: Work with your real estate agent to create a compelling offer if you have appointed one.
– Include contingencies: Depending on your circumstances, include common contingencies like a satisfactory home inspection or mortgage approval in your offer to protect your interests.
– Personalise your offer: Add a personal touch to your offer by including a well-written letter to the seller to ensure that your offer stands out. In your letter, you can express your genuine interest in the property and explain why it's the perfect home for you.
– Be prepared to negotiate terms: Once the seller responds to your offer, be prepared to negotiate terms. This may involve adjusting the purchase price, requesting repairs based on inspection findings, or negotiating the closing timeline.
“While it's exciting to find a home that you love, it's essential to be able recognise when it's time to walk away from a deal,” Maritz said.
Having a clear understanding of your priorities and deal-breakers will help you make this decision, and don’t allow emotions to cloud your judgement.
According to Maritz, walking away from a deal that does not align with a buyer’s needs is a sign of a savvy and confident negotiator.
IOL Property