What it takes to win when buying a property

Buying a property is one of the biggest financial decisions you’ll make, and with competition heating up again in many markets, having a clear strategy is essential.

Whether you’re a first home buyer or upgrading to your next family home, the buyers who walk in prepared, with a plan in place, tend to walk out with the keys.

Here are four key areas to focus on if you want to give yourself the best chance of success.

1. Know your numbers

Before you start scrolling through listings, it’s important to know exactly what you can borrow and what that translates to in terms of purchase price. Have a clear upper limit so you’re not stretching beyond your means in the heat of the moment.

For some buyers, especially first home buyers, it may also be worth having a “Plan B”. For example, could your parents step in with a small contribution or act as guarantors if you need that final push to secure the right property?

It’s not always necessary but knowing what’s possible before you start bidding removes stress when the pressure is on.

2. Have a negotiation strategy

Remember, the selling agent doesn’t work for you — they’re there to get the best possible price for the vendor. That means your first offer is almost never your last. Go in with at least two potential increases up your sleeve, and make sure you’ve got a story to support each step.

For example, your final increase might be explained as stretching every last dollar of your borrowing capacity and having approached a family member for a small contribution because you’re committed to making the home yours.

And while your story may not always represent the full picture, it’s important the agent has something to relay to the seller when they’re convincing them to accept your offer.

At the end of the day, you’re there to win the property, and the way you present your story could be the difference between securing the home at the right price, or being pushed higher than you wanted to go.

The key is to make your final offer look and feel genuine, like you’ve given everything you can.

3. Set your soft cap and hard cap

If you’re heading into an auction, this is crucial. Your soft cap is the price you’d ideally like to stop at, say $800,000. But in the heat of bidding, if you’re that close, it may be worth having a hard cap that allows for a little extra flexibility.

For example, you might allow yourself an extra $20,000 if the property is within a whisker of your limit and still represents value. The key is discipline: once you hit the hard cap, you walk away.

4. Plan for properties selling above the range

Despite regulations around underquoting, it’s common to see properties sell above the quoted range, particularly in competitive segments like the first home buyer market.

As a rule of thumb, be prepared to spend up to 10 per cent above the top end of the advertised range. If that’s beyond your means, you may need to reset your search criteria, otherwise you risk wasting weekends looking at homes that will sell out of reach.

By having a plan before you enter negotiations or step into an auction, you’ll not only improve your chances of securing the right property, but you’ll also save yourself the time, money and emotional rollercoaster that comes with one of life’s biggest purchases.

Have a question you’d like to ask our team? Email [email protected].

Jamie Hyndman is the director of Tribe Financial, a lending and mortgage broking firm based in Torquay and covering Geelong, the Bellarine and Surf Coast.