Eager to score a price discount on your home purchase? Of course you are. We reveal how much of a discount sellers are currently offering – and what you can do to flex your negotiating muscle.
Today’s homebuyers have a chance to enjoy a rare double win – the savings of lower property prices in many areas, coupled with seller discounts (below the original asking price) averaging 4.4% across our state capitals.
On today’s median capital city home value of $973,525, a 4.4% discount could see buyers save around $42,835 on a home purchase.
A discount on your home’s purchase price could also mean paying less stamp duty, plus the potential savings of lower monthly repayments on a smaller home loan.
Why are sellers offering bigger discounts?
This time last year, homes across our state capitals were selling for discounts averaging around 2.9% according to Cotality.
But, in what is fast shaping up as a buyers’ market, many sellers are prepared to knock more off their property’s asking price in order to secure a sale.
That’s seen the typical capital city discount jump to 4.4% – the highest in five years.
Where are buyers scoring the best discounts?
Homebuyers in Sydney and Perth are landing the biggest discounts nationally, of about 4.8%, says Cotality.
In Brisbane, homes are typically selling for 4.7% less than the original asking price.
Discounting is still sharp in other capitals including Canberra (4.0%), Adelaide (3.9%), and Darwin and Melbourne (both 3.8%).
In Hobart, buyers are negotiating discounts of about 3.4%.
In regional areas, sellers are offering discounts of around 3.9%.
What you can do to negotiate a discount
Not every homebuyer is comfortable asking for a price discount.
However, even a small discount can add up to savings worth tens of thousands of dollars.
And today’s level of price discounting may not last long.
Here are three simple steps that could help your negotiations.
1. Know your borrowing power
Time spent inspecting homes that are beyond your budget is time wasted.
Worse still, it could mean missing out on a place that may otherwise have been ideal for you.
That’s why it’s so important to talk to us to understand your borrowing power before you start checking out properties listed for sale.
It lets you know your financial limits, so you can focus on homes within your budget.
2. Have home loan pre-approval in place
Pre-approval means a lender has given you an initial thumbs-up for a home loan.
When you make an offer on a place – and it’s accepted – the lender will decide whether to give you full approval (also known as ‘unconditional approval’).
The beauty of pre-approval is that it gives you more clarity over how much you can spend on a home.
It can also be a real confidence booster when it comes to making an offer.
As an added sweetener, pre-approval shows you are a serious buyer who can potentially close the deal quickly.
This can be very appealing to sellers, who may be more open to price negotiations.
Talk to us about organising home loan pre-approval before you start home-hunting.
3. Use pre-purchase inspections to drive a discount
A pre-purchase building/pest inspection may be an additional cost to wear, but it can reveal areas where a property needs work.
If a pre-purchase inspection shows any shortcomings on a home, you may want to use these as a bargaining chip in your negotiations.
Take advantage of discounts being at a 5-year high
Not every seller will be open to a discount.
Some may have a set price in mind, and won’t budge.
That said, if you head into the market with a clear idea of your borrowing capacity and loan pre-approval under your belt, you may be well-placed to score valuable savings on your new home.
Call us today to put yourself in a strong position to negotiate a price discount.
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