10 Steps to Ensure a Profitable Deal While Buying a Home

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  • 14th May 2024
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10 Steps to Ensure a Profitable Deal While Buying a Home
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There are a few simple things to remember while buying a home to ensure that you get the best deal. Here are 10 of them listed below:

1. Research

Keep the importance of budgeting, market research, and realistic pricing in mind to ensure your home purchase is profitable.

2. Decide price for specific locations.

Start with market research on home prices in the area and aim to negotiate a price that is fair for both you and the seller, avoiding too low offers that could drive the seller to other buyers.

3. Check reports for property trends

Pay attention to reports on rising property prices and declining property sales. Evaluate areas where properties are built but remain unsold, potentially fitting your budget.

4. Understand listing prices of sellers and brokers 

Sellers typically list homes 15-20% higher than market rate, and brokers may increase prices further to maximize their commission, which is based on the selling price.

5. Navigating broker commissions

Consider buying directly from the homeowner without a broker to eliminate commission costs. Look for property advertisements online and in local media.

6. Check status and history of property

Investigate properties available for over six months; they may offer room for negotiation and discounts, especially if they are not selling quickly.

7. Check mortgage background of property

Find out the amount of any existing mortgage and check if the seller has missed payments, which could allow you to negotiate a better deal.

8. Check rental income to determine the value of a home

Ensure the potential rental income is at least 4-5% of the home's purchase price annually; if not, it might not be a worthwhile investment.

9. Communicate your budget to your broker

Clearly communicate your budget to the broker so they and the seller can align their expectations to match what you are willing to spend.

10. Stick to a budget

Stick firmly to your budget and resist any pressure to increase it. Never express urgency in the purchase, which can weaken your negotiating position.

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