How to buy a property
Author: Brett Sutton
Exciting times! Your broker has given you the green light to start shopping for your dream property but what happens next?
1) Define what you want
No matter if you are buying a property to move into or one for investment you should define what the needs the property has to fulfill and what you are prepared to compromise on.
Work out your musts and your would also be nice list.
Especially, when buying an established property it is difficult to find one that ticks every box so predefining what you want will save you a lot of time and energy.
2) Start shopping.
Download the real estate search apps on your device, for the areas and property types that you are looking for.
Start heading to open homes and don’t be afraid to call agents and book private appointments to view properties.
Tell the agents you are ready to buy and build relationships with them.
Register for any VIP lists they may have as sometimes not all properties go on the real estate websites, some agents just market to their database.
3) Once you find “the one” – do your research.
Request a copy of the contract and have your conveyancer review it.
Do a price search for the suburb, is the price guide reflective of similar properties that have sold?
Get a sense of interest in the property, how many other buyers seem serious.
Drive around the surrounding streets, get a true feel for the neighbourhood - at different times too - school pickup & drop off, peak hour, Saturday morning - how does the traffic and access vary.
Also view the property at different times of the day, agents will try to set inspection times when the property shows at its best when the street is quieter or gets morning sun but none in the afternoon etc.
Talk to the neighbours, get a sense of the type of people you could be living next to for a very long time.
4) Set your budget for this property.
This is where it gets tricky knowing what to pay. Set a limit as to what you are prepared to spend.
Often this is budget related but a good question to ask yourself when establishing a price ceiling after doing your research is "would you be upset if someone paid more than what you are thinking". If your answer is NO then you have found the point you are comfortable to spend to.
5) Make an offer.
There are two ways to buy property; one is at auction and the other by private treaty (for sale). The strategy you may consider in each situation is different.
Private treaty the owner is expecting offers to be presented by the agent. Ask the agent how they will be managing the negotiation, important to know in situations with multiple interested parties making offers. Knowing your limit, start a little lower without being offensive.
Ask the agent how they would like your offer submitted (in writing or is verbal ok?). Some will have a form to fill out. Good practise is to follow up any verbal offer in writing for clarity and avoid any future confusion.
Highlight any additional conditions to your offer ie, a delayed settlement or extra inclusions not mentioned on the contract.
Ask for an indication of how the agent will get back to you and in what timeframe.
Be clear on what the expectations are if you offer is accepted.
If the property is going to auction you may consider making an offer prior to the auction.
Follow the same steps above but understand the vendor may not accept offers prior to the auction. In a rising market it could be a good idea to offer early in the campaign or is a normal or declining market offer later in the campaign.
6) Your offer is accepted. There are two ways to exchange contracts.
First is a solicitor exchange – the agent send the details to the solicitors and they coordinate the purchase from there.
The other way is to pay a 0.25% of the negotiated price, non refundable deposit and sign contracts with a cooling off period. This way starts the process sooner and locks the purchase in so you can not be gazumped (someone offers a higher amount that the vendor accepts).
7) Ask the agent to put up the sold sticker once it exchanges.
Get a heap of photos for social media and be sure to tag your broker telling everyone what a great experience you had with them ;)
Brett Sutton is a former real estate agent, now broker sharing his tips for buying a home.