Prosper from a private sale
WHILE auctions demand much of the glory and attention of media coverage, most homes are sold by private sale, which is the technical term for the straightforward method of offering a home for sale, usually with a price or price guide.
With private sales, the buyer can offer to purchase at any time and with any conditions.
Here are my tips for successfully buying a home listed in this way.
Let us imagine the scenario of a free-standing home priced at $500,000. Before you start, establish the market you are in.
Is it a seller’s market, or a buyer’s market? A strong market means you may have to offer full price and go further if other offers are on the table.
In our scenario, this means that the $500,000 price could end up at $510,000-plus. In a quiet market you can offer a lower price — maybe $475,000 — and work up.
The second step is to work out the seller’s situation.
Why are they selling? How long has the home been listed? Have there been any previous offers? If the sale fell through, why?
Ask the agent questions like this Price guide: Agent: directly. They must disclose any defects or issues of which they have a clear knowledge.
However, a seller who listed only a week ago and has a packed open house will not feel under any pressure to sell immediately and will be waiting for that ‘‘top’’ offer.
Alternatively, the vendors may have bought another house before the sale, creating financial pressure, or maybe there is other bad news forcing a quick sale.
If that situation is combined with slower market conditions, this can be the time to make a lower offer.
The third step is to understand what you are buying. You need to understand the title of the property, the boundaries and easements. Look at the building before the building inspection. How old is it? Look in the roof, study the structure from outside, open and shut doors and windows.
Check the appliances, hot water, heating and cooling. Also, examine the electrics and consider broadband availability and speed.
Now check insurance. If there is an issue, find out why. It may affect your whole attitude towards the property and certainly will affect your ability to arrange a mortgage.
Next, visit the property at various times of the day. A quiet street with ample parking could be packed at other times.
The sixth step is to grab a mate. These are the real estate agents’ nightmare as they can scupper a sale. But if these people really know you well, drag them along. They are there to pursue the ‘‘feeling’’ and condition of the home and match it to their knowledge of your likes.
Getting your finances in place, and appointing a lawyer before making an offer, makes you look like you are serious.
If the market is strong you may have to sell your offer and terms to the agent. But never bow to pressure. Make sure you have the purchase checked and don’t compromise your due diligence.
Don’t be afraid to quote issues you feel justify the lower offer; a seller is not attracted to a buyer offering low without justification.
Act professionally and understand the agent acts for the seller, not you.
Having a little insight is a sure way to buy your dream home at the right price. Andrew Winter is host of
on The Lifestyle Channel
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