Whether you’re buying a home to live in or for an investment, shopping for property is an exciting experience. But it’s important that you don’t get caught up in the excitement, as you may make mistakes that will cost you dearly down the track. Thankfully, these expert tips and tricks will help you to secure a good deal, without making expensive errors.
Get your budget in order
Whether you’re saving a deposit for a home or you’re ready to buy now, a budget is a great tool for finding out where your “spending leaks” are and how you can save more money. “Every person can benefit from doing a simple budget,” says Paul Mylott, General Manager of CENTURY 21. “The more you know about your incomings and outgoings, the more control you have over your finances.”
Obtain finance approval
“Right now there are lots of buyers in the market who are making offers on properties, only to find out they can’t get the finance!” says Meighan Hetherington from Property Pursuit in Brisbane. “The seller thinks they’ve sold their property, and discover two weeks later that the contract has crashed. If you’re well prepared, you can take advantage of this situation.” The message? Speak to your lender – pronto!
Shop around for the best deal
Just because you want to secure finance, that doesn’t mean you need to accept the first deal you’re offered. You’re in no rush, so “shop around for the loan that suits your lifestyle,” Mylott says. “Always factor in the possibility of interest rate increases,” he advises. “Ask yourself, could you still afford to make your repayments at a higher interest rate?”
Conduct a thorough inspection
Most people know that they should get a building and pest inspection completed before handing over hundreds of thousands of dollars for a property, but there are a number of other checks you should also consider. “An electrical inspection, pool fencing compliance checks, smoke alarm compliance checks and flood reports may also be necessary,” Hetherington says.
Get a handle on prices
“We’re in a pretty steady market at the moment, where some areas have had a price drop since 2007 and some have gone up 5-10%,” Hetherington says.To get a true indication of a property’s worth, “do a comparable sales analysis to determine the market value of the home, to make sure you’re not paying too much – or engage an advisor or valuer to do a written valuation.”
Know your place in the market
According to Lachlan Fennen, director of Parker Investment Properties in Melbourne, the current property market is good for buyers “because properties are staying on the market for a reasonable amount of time. This means that more properties are available at one time, giving buyers more choice and less competition.” So relax in the knowledge that there are plenty of homes out there, and take your time.
Dig for information
Once you’ve found the property you want, start talking to the real estate agent. “The selling agent is on the seller’s side, not yours, but that doesn’t mean they can’t help you,” Fennen explains. “They want to sell the property for their client and you can use this to your advantage.” Ask the ask why they’re selling, how long the property has been on the market and if any offers have been received, and use this information to help you craft a compelling offer.
Ask for a discount
There’s no time like the present to ask for a discount, Fennen says. “In the current market, buyers can take the time to research and negotiate from a position of power, rather than being pressured to secure a property quickly before someone else snaps it up,” he says. “Anyone can learn to negotiate well with the right knowledge, preparation and practice.”
Back up your offer
If you’re making an offer that is below the owner’s expectations, make sure you provide information about why you believe the offer is genuine. “Work out how you can make the deal sound more attractive to the seller by offering different settlement terms or even rent-back periods,” Hetherington says.
Be prepared to walk away
If you make an offer and the vendor isn’t prepared to budge on price, tell the selling agent that you’re interested in buying the property if and when the vendor is willing to come closer to the market value. “The agent might call you if the seller starts to soften their expectations,” Fennen says. “There’s a small chance that the property could sell to someone else, but it is unlikely and will sell for more than it’s worth, so you’re better off buying elsewhere anyway.”
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