It’s not always as cut and dried as that, but if you turn up to an auction or a real estate agent’s office ready to bid or negotiate, with your finance pre-approved, then you’re in a much better position than someone without pre-approved finance.
There are a few “must do” things before you start negotiations or set your auction budget.
The first is to talk to your broker and get your finance organised. The broker will walk you through what documents you need to supply and talk to you about your borrowing capacity based on the information you’ve given them. They will present you with your loan options and you’ll be asked to supply the required documents. They will then work on submitting your application and securing pre-approval.
While they’re doing that, you can start your property search in earnest. Keep in mind your borrowing capacity and your list of “must haves” and “negotiables” when you’re searching for your new home. You might need to look a little bit outside of your chosen location, but you might be able to get more for your dollar if you do. Think about what’s important to you in a home and start looking.
Once you’ve narrowed your property selection down, research the LOCAL property market for RECENT comparative sales. Note – local and recent. With the changes to property values over the last couple of years, comparing to a sale that was two suburbs over or just 3 months ago isn’t always a great indicator of the property’s value today. Make sure you independently research the market rather than rely on information given to you by the vendor’s agent. Your broker may even be able to help you with that.
When you’re confident in determining a fair price and your budget ceiling, then it’s time to start negotiating.
Get prepared and be ready.
There will be opportunities that present themselves over the next few months once we come out of the market slowdown caused by the pandemic. If you’ve got everything in order, you’ll be in a perfect position to negotiate.
Good luck and please let me know if there’s anything I can help you with.