How much interest should you show about a property you like?

7 Mar

Worried you will seem over keen? Unsure how to play it cool?

When you find a property that you love, how much interest should you show?

There is no one size fits all answer to this question. However, for properties on the market with a standard four-week campaign, start with these two principles:

Don't lie about your interest; and
Your budget does not define the value of another person's property.

To break it down a little bit further...

Make sure the agent knows you are interested

You attend an open home and you have a good feeling. You like this one. The agent will call you at some point in the next 48 hours. Answer the call, or at the very least call them back the same day. Most agents will categorise buyers as either hot, warm, or cold / just browsing.

You want to land yourself in the warm category for now. If you show no interest or don't answer calls, you may find the property sold to someone else without you knowing. Even if a property has a scheduled auction date, it may sell prior.

The agent will ask if you are interested.

Respond with, "I am interested but I am not sure I can afford it."

This immediately opens up a dialogue with the agent about what the vendor's price expectations are. Remember the agent's job is to create competition and keep you interested so they will downplay what it might sell for.

Ask a few further qualifying questions of the agent:

How much interest have you got in the property?
Have any offers been submitted?
Is the vendor open to selling before the auction?
What are the vendor's expectations on price?

Let the agent know what your next step is

Something that indicates you are a serious buyer and not wasting their time. Examples:

I will come back to the next inspection and/or my partner will come to see it
Please provide a copy of the contract so I can send it to my solicitor / conveyancer
Please provide details of the building or strata report
Let me know if someone else makes an offer on the property

At this stage, you've helped the agent understand that you are interested and you've not given away anything about what you would pay.

Navigating price at this early stage

If your maximum purchase price sits under or equal to the price guide, then it is likely you are wasting your own time. However, if you have a budget that extends above the price guide, then you have a chance.

Most agents will ask, "If you were to make an offer, what price range would it be in?" They want to know where you are on price to understand if your feedback reflects the vendor's expectations.

A good way to respond without actually answering the question is:

"My budget doesn't define what the value of the property is"

You can elaborate that:

You need to do further research on what comparable properties have sold for.
You need to complete your due diligence on the building or strata report before you have a full understanding of where you believe the value sits.
You and/or your partner are working closely with your mortgage broker to re-run your numbers.

In summary, be honest about your interest and be reserved about your price in the early days.

Don't waste your time or the agents. You might not like the agent (and that's ok!), but you want them to work with you to ensure you have the best chance of being the successful purchaser.