Step 6: Price negotiation
Price negotiation with landlords through estate agents
After selecting a property, the prospective purchaser should give the estate agent clear and explicit instructions regarding the offer or counter-offer.
Before making an offer, purchasers should ascertain their own financial positions, loan repayment ability and the necessary financial arrangement. They should also pay attention to the latest policies on mortgage loans issued by relevant organisations. For example, the Hong Kong Monetary Authority may issue guidelines on the granting of mortgage loans for properties by banks from time to time. The debt servicing ratio (debt-to-income ratio) and loan-to-value ratio may also vary with the guidelines.
Estate agents must not make any representations to assure a prospective purchaser that he will successfully obtain a mortgage loan to finance his property purchase or the terms of mortgage loans. Before making property purchases, home purchasers should understand their abilities to repay mortgage loans. They should also make enquiries with banks about the valuation of the property and whether they can obtain sufficient mortgage loans to finance the purchases.
After negotiations have been successfully concluded and before arranging for the parties to enter into a sale and purchase agreement, the estate agent must identify and verify the identity of the client (whether purchaser or vendor). Click here to learn more about the relevant statutory requirements.