It can be heartbreaking to make an offer and then find out you’ve missed out on your dream home.
Sadly, it’s not unusual in the current Perth property market for us here at Red Fox to meet buyers that have had multiple unsuccessful attempts trying to buy.
Sometimes it simply comes down to there being a more motivated buyer with a higher budget and stronger conditions on the day.
In other instances, it can come down to a buyer repeating the same tactics that are setting them up to fail.
Here’s 5 common mistakes we see buyers making that may be costing them a home.
- Over-reliance on automated valuation reports.
“I have a valuation from my broker who says it’s worth $X”.
Unless a licensed valuer has been through the property, you don’t have a sworn valuation, you have an automated valuation report (AVR).
An AVR is simply a computer-generated estimate. AVR’s are useful in flat markets in suburbs where the properties and blocks are roughly the same age, design, and size where the sales chosen by the program are likely to be comparable. They are often useless in inner-city areas where there’s significant variation between the type of properties, or in a rising market where the newest sales haven’t been reported.
If you’re not sure about the price, ask the selling agent to go through the most relevant comparable sales with you.
- Too many or complicated conditions.
This is also called trying to be a bit too smart. Apologies to lawyers, but you’re often the worst ones for this.
Sellers are looking for the easiest route to a result. If you’re loading your offer with conditions, especially those that come with a get out of jail free card or the ability to screw the sellers further on price, the seller will likely tell you to stick it. And if you’re in competition with other buyers for the property, you’ll have no chance of getting the home. The seller (and the selling agent) is always going to go with the most straight forward offer.
- Coming in too low with your offer.
I get that no one wants to overpay for a property, but it’s rare to score a bargain. And if you’re obsessed with buying cheaply, it’s probably going to cost you your ideal home.
Sellers expect fair market value and good agents will help them to get it. If you come in too low with an offer you risk insulting the seller and they’ll either a) choose not to deal with you or b) counter with something well over what they genuinely would have considered. Either way, no one wins.
- Trying too hard to win.
Also called being a bit of a dick. Don’t let your need for a deal and to “win” a negotiation cost you and your family a home.
Remember that word – home – it’s about your life. Don’t let your ego get in the way of having a great one.
- Taking too long to decide.
Buyers often say, “We’re really interested in this property, please let me know if someone else makes an offer”. Why in the world would you want to wait until you’re in competition to make an offer for a property?! Once you’re in competition, you’ve lost the right to negotiate one on one with the seller and have no choice but to compete with the other buyer, or buyers, for the keys. If you’re keen on the home, do something about it and test the waters with an offer. Dragging your heels typically only leads to disappointment. Yes, it’s a big decision, but not making one can have costs too.
Have you been repeatedly trying to buy a home and keep missing out? Recognize yourself in one of these or is there something else you think is the issue? Send us an email or leave a comment below. Maybe we can help!
Image from Canva