Whether you’re a seasoned professional at buying property or just starting out, we have some great inside tips to share with you to make the process far less stressful.
WHEN STARTING OUT
If you’re at the beginning of your property search, there are a number of things you can do to help you find the perfect property faster.
- ALWAYS ensure that you have a pre-approval in place BEFORE you go out looking. You may be lucky enough to find something on your first day of looking, but have to miss out because you were unable to act quickly enough.
- Register your details on various property websites and subscribe for daily or weekly property alerts. This will ensure you receive a notification as soon as a new property is listed that matches your search criteria. Don’t forget to check out the private sale websites too, ie for sale by owner.
- Try not to be too specific with your search criteria as you may miss out on opportunities that could be ideal subject to just a few minor alterations.
- Make friends with the local real estate agents. Ensure your details are on their database and keep in contact with them on a regular basis. The better the agents know you, the more chance you have of them thinking of you first when a new property is listed. But remember, do not reveal your price limit – only give them a vague idea of your budget. You don’t REALLY want them knowing how much you can afford to spend! Real estate agents are paid by the seller and (in theory) are working in their best interests not yours. Although sometimes this is debatable!
- Attend as many open houses and Auctions as you can. Get a good feel of values in your chosen area so that when it comes time to negotiate, you are fully informed.
YOU’VE FOUND A PROPERTY
Great news that you’ve now found a property (or 2) that meet your criteria. It’s always a good idea to have negotiations running on a couple of properties at one time where possible, especially in a hot market where properties can sell on the first day. You don’t want all your eggs in one basket. Here are a few things to consider to help you one step closer to a successful purchase.
- Don’t be afraid to let the agent know you’re interested. If it’s the first open house, approach the agent and ask a few questions, such as “Why are they selling?, Will they consider an offer prior to Auction?, What comparable sales do you have to substantiate your price guide?, Is there anything about the property you’re aware of that could negatively affect it’s saleability?”. By law, real estate agents are required to disclose any information about the property that could detrimentally affect you purchasing it and it’s often a good idea to ask this question.
- Request a copy of the Contract and have it reviewed by your conveyancer or solicitor. If the property is being sold by Auction, you should have all due diligence carried out well in advance, ie strata search, building and pest inspection etc to ensure the property is free from any defects or issues that would prevent you moving forward.
- Most importantly, keep in touch with the agent throughout the process. There have been many stories about properties being sold prior to Auction without the agent giving other buyers the opportunity to make an offer. Not a very pleasant situation to be in especially when you would have paid more than what it sold for!
TIME TO NEGOTIATE OR BID AT AUCTION
Once you are satisfied that this property is definitely for you, it’s time to get serious and commence negotiations with the agent or attend Auction day. Some points to consider at this stage of the process are as follows:
- When commencing negotiations on a private treaty sale (ie with an asking price), be careful not to start too low or too high. If you start too low the seller will be offended and you risk losing credibility. You start too high then you leave nowhere else to go. With the number of different methods of pricing out there these days, it can sometimes be difficult to know where to start. When there’s a set asking price you will obviously offer less, by how much depends upon the property and whether or not it’s been priced correctly in the first place. By now you should have enough experience to recognise an overpriced property. Adjust your offer accordingly and use your knowledge of comparable sales to justify your pricing.
- The ‘Offers Over’ method is one that I find incredibly misleading and one that can vary drastically from agent to agent. Typically an agent works on approximately an 8-10% variation when using this method and most of the market have been conditioned and become accustomed to it. However, if the agent’s figure is too high to start with then they risk nobody turning up to the auction – this could be a great opportunity to purchase the property below market value. And if it’s too high then you may risk not looking at the property altogether. Ultimately, the property is worth as much as someone is willing to pay for it and sometimes this could be considerably more than anyone would expect.
- On Auction Day, it’s a good idea to have 2 figures written down on a piece of paper and kept inside your pocket. The first figure will be how much you can comfortably pay for the property. The second is the absolute maximum and walk away price you can go to. It’s incredibly easy to get caught up in the emotion of an Auction and pay much more than the property is worth. Keep this piece of paper close by during the Auction to remind you. Or if you don’t trust yourself – hire a buyer’s agent to bid on your behalf. Bidding with your heart and not your head can lead to many years of regret!
We hope you’ve found a few tips here to help with your next property purchase. We have plenty more we could share with you. As Buyer’s Agents, we can assist with everything from bidding at Auction to our full service of search and secure. Even if you’ve already found a property but not sure about the negotiation phase, we can assist with that too. With over 22 years experience as Licensed real estate agents, we are well equipped to represent you. Rest assured you will always be at the front of the queue and will not overpay for your next property.
As a special ‘thank you’ for reading this article, we’d like to offer a discount on our Secure Only Service. This is where you find the property and we arrange all the due diligence, provide you with a comprehensive property sales report and either negotiate directly with the agent or bid for you at Auction. Our Service Fee is normally $850 (incl GST) but for the first 5 readers, we are happy to offer our Service Fee for only $550. Email us at email@example.com to register your details. Please note, a success fee of $1800 also applies to this service.
For more information regarding our services, visit us at www.innovativeproperty.net.au or call 0411522233 and ask for Kathryn.