While this is by no means a definitive guide, and you might have your own strategies there are a few things which pop up time after time with our lovely borrowers. I
1 - THE most important thing is to have your finance in order, whether this is an official preapproval (safest) or having started the process with your broker who can give you a good indication of your success you need to have at least considered your finances and be ready to go.
2 – Set your price and stick to it – don’t be tempted to offer more than you are comfortable with or can afford. This is especially important in the heat and stress of an auction, so easy and so tempting to
3 – Remember that while we don’t want to be offensive to our seller you are not out to make friends here, if a listing says “$500,000 - $550,000”, as an example, use your judgment as to your starting point – you don’t have to conform to listing. It may be you feel you want to start at $450,000 because you know its rare to have the first offer accepted and you are only willing to pay the bottom end of the listed range. Any (sensible) offer gets you on the negotiating table with the agents. Use with care, however, if there is a lot of interest in the property you will probably have to be a little more generous or move on.
4 – Settlement terms can be an excellent non-cash negotiating point. A recent example where our client won a purchase is where they were able to settle quicker than another party with a higher offer and the vendor needed to secure their next home.
5 – Offer something outside the norm. I have no idea why but an offer which is not rounded to the nearest thousand often gets attention and works. I have clients who won a purchase recently where the offer was $xxx,148, and another example where the process was to submit your best offer and highest offer wins, like a silent auction, in this instance my lovely client offered $1,XXX,200 and won a million dollar home by $200 (and before you agents shoot my ridiculous ideas down – I have proof of it working!)
Article for The Western Weekender