When searching for a property, at some point, a real estate agent will likely ask you, “What’s your price range?”
This question can be tricky.
While you don’t want to reveal too much and give away your entire budget, you still need to provide an answer that conveys you are a serious buyer.
Balancing transparency and strategic discretion is key to navigating this common situation.
In today’s blog, we delve into strategies for preparing and confidently handling this crucial question when interacting with real estate agents.
Why Agents Ask About Your Budget and Why You Should Answer
Real estate agents inquire about your budget to assess your seriousness as a buyer.
By sharing an idea of your budget, you can demonstrate that you are a committed buyer and not just browsing and ensure the agent suggests properties that fit your financial parameters.
However, fully disclosing your budget can lead to potential disadvantages.
Here are some strategies for dealing with real estate agents and managing budget disclosure effectively.
Discuss a Price Range or Approximate Figure
Give the agent a price range that is slightly below your actual maximum budget.
If your maximum budget is $1,000,000, you might say your price range is $900,000 to $960,000.
Alternatively, you can give the agent an approximate figure: “I can broadly look at $960,000, give or take; it comes down to the value I see, and I have some flexibility.”
This statement shows that you have some room to move without revealing your upper limit.
State an ‘Ideal’ Price
This method helps keep your upper limit undisclosed while still providing the agent with an understanding of your financial scope.
For example: “Our budget preference is up to $960,000.”
Leverage Market Knowledge
If you are active in the market, you should attend auctions and track recent sales in your own excel spreadsheet.
You can then use this knowledge in your discussions and negotiations with agents, which will allow you to navigate encounters with agents with greater confidence.
You can mention specific properties that have been sold, indicating your awareness of market conditions without explicitly stating your budget.
If you do this with care, you will find that your understanding of where market value sits will be as good, if not better, than the agent who may not be tracking all the sales in your price bracket, inclusive of competitor listings
For example: You could say you didn’t bid at a particular auction because the property was sold beyond your budget.
You can also share properties that have sold within your range, so they have a sense of where your budget sits, whilst also explaining why you didn’t bid on a certain property.
This will assist the agents to match the type of property you are looking for to ensure you are made aware of them early and are able to build rapport with the agents, which is important.
After all, their job is to make sales and bring vendors and purchasers together.
Listen to the Property Trio podcast
Take a listen to these episode for more in-depth insights on navigating a successful property purchase and putting your best foot forward with real estate agents.
#20 – Bidding Tactics 101
#22 – What determines your Property Strategy
#29 – Congenial negotiation tactics and how to apply them in the right situation
#77 – Understanding the real estate agent behaviours that buyers don’t like
#102 – How to determine property market values by using comparable sales
#117 – Understanding the real estate agent behaviours that buyers don’t like – Part 2
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