Buying Tips

Outlined below are 10 great pointers for buyers looking to purchase a property.

Buying Tips

1. When buying a property, do your preparation and research. The more knowledge you have about the market , the more likely you will be to purchase a good property on favourable terms. It is easier today than at any other time in history to become knowledgeable about real estate in a short space of time. The internet is a treasure trove of quality information for property buyers. You can order an online valuation of a property for about the same price as a dinner for two at your local restaurant. As well as providing virtually every property in your area currently for sale, the various real estate web sites also have a wealth of information about properties that have recently sold in your area. You will be surprised how quickly you will become knowledgeable about property values in your area once you start looking and researching.

2. Visit open homes. Another part of the preparation phase when buying the property. And one day you may just wander into an "Open For Inspection" and realise you have just met your dream home! Visiting open homes is a great way to view multiple properties quickly and easily. Just get a list of open homes for the weekend and off you go! The agent in attendance will be delighted to see you. Every agent loves to tell his or her sellers they had a good attendance at an open home. Ask the agent lots of questions - what they expect this home to sell for; can they give you examples of recent sales in the same area; what does the agent currently have for sale that represents great value? The more questions you ask, the more knowledgeable you will become. As someone once said, knowledge is power.

3. Organise your finance before you start looking. As with most things today, getting an idea of what you can afford to borrow to buy a property is quick and easy. From mobile lenders who will visit you at your home or workplace at whatever time is convenient for you, to various internet sites, you can quickly establish your borrowing capacity which will then enable you to confine your search to properties you can afford. It is a good idea to establish what your maximum borrowing capacity is - you may not choose to spend that much, but it is helpful to know how much spending power you have in reserve if you see a property you absolutely must own! (Caution - the opportunity of a lifetime comes up every week or so, somewhere in Australia!!)

4. When you see the right property, don't delay! You've done your research, you have pre-approval for a home loan, you feel you are ready to make an offer to purchase. Then, you see a property that appeals to you, seems to offer good value, and is in a good location. You have a look through, the agent invites you to make an offer and, prudently, you tell the agent you are definitely interested, but you just need a little time to think about it. After all, it is a big decision and you don't want to rush in to something you will later regret. The next morning, you phone the agent and tell him you are ready to make an offer. The agent says something like this: " I am sorry, that property went under contract last night. It is no longer available. Perhaps I can find you something else." Oh, no! Devastation! How dare someone buy your home. You tell the agent to see if he can find something else for you, but, deep down, you know nothing quite as good as this one is likely to come along. The point is - if something looks particularly good value to you, it is going to appear the same way to other buyers. There is always a buyer for a property that is priced correctly, presents well and is in a good location. No matter how "bad" the market, good properties that are correctly priced, sell.  You can always make your offer to purchase conditional upon your solicitor approving the contract within a day or two of signing the contract. The important thing is to secure the property before someone else does!

5. When you make an offer, be prepared to pay fair value. Offer something close to the sum you are prepared to pay; perhaps leaving room to make a second offer if your first offer is rejected. If you come in to far below what you are really prepared to pay, the seller may feel insulted and become obstinate in their response. Generally, you will fare better in your negotiation if you submit a fair and reasonable offer to begin with. If the seller will not meet your price, you can always walk away from the negotiation.

6. The negotiation involves more than the price. When it comes to negotiating with the seller, be creative in how you present your offer. A negotiation involves more than the purchase price. For example, you can waive the normal five-day cooling-off period (five business days) if your solicitor explains the implications of doing so to you and signs a waiver form on your behalf. This would demonstrate to a seller that you are serious about the purchase. Do you know someone knowledgeable enough to check out the property for any building defects or signs of termite damage before you submit your offer. Again, if your offer did not included a period for building and pest inspections, that should be more attractive to a seller that a contract that was subject to such conditions within a 21-day period, for instance.  (Obviously, you may need to insert such conditions if you do not have a builder friend prepared to visit the property with you prior to submitting your offer). Ask the agent to find out the seller's preferred settlement date. If you are prepared to give the seller a longer or shorter contract, the seller may be prepared to be more flexible with their price. Be creative - look at ways to make your offer to the seller more attractive other than just increasing your price.

7. Use your imagination! Be prepared to look beyond dirty carpets, peeling paint and the smell of cigarettes (for example). Who knows? There may be beautiful timber floorboards under those old carpets; the cigarette smell will disappear when the smokers vacate and the walls are painted; and a coat of fresh paint does wonder for any property. Sometimes, a little elbow grease and modest investment of a few thousand dollars can transform that "ugly duckling" into a beautiful swan! Visualise what the home could be, rather than what you see at first glance. People with imagination have made some tidy profits in real estate for relatively little effort!

8. Don't dismiss auction properties. Buyers prepared to buy at auction have picked up incredible value at times. Sellers who choose to market and sell by auction are generally serious sellers. Sometimes it is more important to a seller (who needs to sell in a short time frame) to secure a cash-unconditional contract rather than a particularly high price. You may find you are the only bidder at the auction, in which case it is quite possible the seller may accept your cash offer rather than hold out for a contract for a higher price but which includes special conditions such as finance approval, building and pest inspections etc. Don't worry that an auction property is advertised without a price - if it looks similar in value to priced properties you have seen, simply submit the offer you feel represents good value to you. If you can get yourself into position to bid under auction conditions - cash/unconditional, normally with a 30-day period before settlement, you may find you achieve an exceptional purchase. If you don't have cash for a 10% deposit, ask the agent if you can bid on a smaller deposit amount (if the seller agrees you will be able to do so) or ask your lender to provide a bank guarantee of deposit. (The bank guarantees the deposit amount on your behalf rather than you having to come up with cash for the deposit).

9. Familiarise yourself with the sale documentation before you begin a negotiation. Ask the agent for a copy of the contract for the property before you submit an offer. If you want to have your solicitor look at it before submitting an offer, you have every right to do so. If you are familiar and comfortable with the paperwork beforehand, you will find the process signing a contract to purchase far less daunting.

10. Remember to relax and enjoy the experience. Although some elements of searching and purchasing a property can be a little stressful, all in all buying a new home is both a fun and exciting time. 

Happy house hunting! .. If the team at Kingdom can assist you further in any way, please don't hesitate to let us know.