Like most things, with training and research, buying a property can be an empowering and amazing experience. But, if you make an offer or put your hand up at an auction, without doing your research, you could be creating a whole load of pain for your future.
Taylors Strategic Partner, Elaine Davies – Buyers Agent and Owner of New Road Property – explains, to avoid creating pain, when you find a property that you like and think you're in with a good chance of buying it, stop to ask yourself, 'what evidence do I really have to make myself feel that I’m in the running here?'
Here are Elaine Davies' six top pre-purchase research tips to avoid pain on auction day or private treaty:
1. Stop And Dig Deeper
With the amount of money involved, give your property search the respect it deserves. Missing out could cost you a few thousand dollars in solicitor and report fees but buying the wrong property, especially for too much, could cost you tens if not hundreds of thousands over the long term.
It takes years for a professional property buyer to know an area’s demographic, properties and real estate agents – in fact it’s an ongoing learning. However, whether you’re new to the property market or have had your heart and sense of sanity broken with missed 'dream properties' there are things you can do to pump up your buying power. Research, research and more research!
When you build strong foundations, the rest of your buying strategy should fall into place.
2. Do Your Research And Look Everywhere
Have you done your area research? Your property research? Have you compared the property that you like to other resent sales?
Unless you know what’s happened in the past, how will you know what going to happen in the future?
3. Hit The Streets
Get up early on a Saturday morning and go and see as many 'open for inspections' as possible. Familiarise yourself with the properties but also, get to know the real estate agents – build relationships.
Next, follow those campaigns to the end. Go to the auctions or if it they sell by private sale, try to find out what they sold for and how much competition there was – were there two people or ten people trying to buy it?
Compare that price to the agent’s 'quoted' price or their 'comparable' sales. If the property sold for higher than the agent had lead you to believe, then that's very likely to happen again with that agent.
Also, hop online to research recent comparable sales. Both domain.com.au and realestate.com.au have a tab that will take you to recently sold properties. You can search by suburb, price range, bedrooms and lots of other criteria that you're looking for.
4. Take Control
With your newfound information, the next time a real estate agent quotes you a price on a property that you like, run your own race and compare that property to recent sales. Be detailed and compare aspects, positions, neighbouring properties and gradually, you’ll get nearer to the actual price that the vendor will sell for.
Now that you’ve finished your research, do you still think you can afford that property? If it’s 'no', then you can walk away before getting too emotionally attached and without spending a dollar. If it’s 'yes', then move onto the next stage of research.
5. Pre Auction (Or Offer) Checks
Before you get put in an offer, there are people whose professional advice and opinion you’ll need to get and most of the time, this will be at a cost.
This isn’t too jarring on the first property you may miss out on but by the second, third or even fourth, your property search becomes increasingly expensive.
However, no matter how far into your property search you are, avoid buying the wrong property and risk robbing your future self - always get your reports and legals.
- Building & Pest Report: for a torrens title house, a building and pest inspection is always needed and yes, even if it is new build.
- Strata Report: for strata buildings and company title buildings, a strata report is always needed too. Read through all the notes and see what money has recently been spent on the building – is the roof new or full of holes, has the exterior been painted or are the windows crumbling?
- Legals: get the contract thoroughly checked by a legal representative.
- Other Professionals: do you need to get an architect, designer, engineer, plumber or any other tradesperson’s advice? If so, get them all done before you agree on the price, otherwise, negotiations will have to start all over again.
- Council Checks: this one is free. Spend a few minutes on the phone to your local council or check their website to make sure there are no small (ie: the house next door) or large (ie: a huge tower block or a freeway) developments planned that will change the living conditions of the property.
Once all the above is complete, it’s time to put your offer in.
6. Private Treaty Offer
If it’s a private sale, you’ll need to negotiate with the selling agent. Once you agree on a price, by all means confirm your offer verbally or by email but it won’t be yours until contracts have exchanged. If another buyer puts a higher offer forward - before your contract has exchanged the agent - by law, has to take that to the vendor, their client. Expediency often wins the prize so be ready and move quickly.