This is a busy market! As a buyer you have more choice than we have seen for quite some time. This can create problems however, like how to get around 10 houses in 1 Sunday afternoon! And once you have seen what’s for sale – how do you choose which home to make an offer on?
Firstly, since most properties are still being sold with multiple offers it is imperative you get your finance sorted first. Every bank is different so I strongly recommend talking to a mortgage broker to make sure you get the best possible deal on rates and signing bonuses. Check out my interview with one of the best around.
To help you filter down your shortlist, here are the 5 key questions I would ask when viewing a home you like:
1. How can I buy this home if I am interested? What will the process be if I place an offer?
Is it a fixed tender or can it sell before the closing date? When will the agent be meeting the owner? If it’s priced – when exactly will your offer be put in front of the owner? How long will they spend calling other buyers to see if anyone else wants to offer? Where is the owner living, or is the property in a trust and how quickly can I expect them to respond to my offer? Know the process and timeframes before you put pen to paper and consider adding a reasonable deadline to your offer if you have any doubts..
2. What do you need to tell me about this home before going further?
Agents have a duty to disclose any known issues relating to the property that they are aware of. It is important to ask this discovery question. Keep in mind that most houses will have small issues so don’t let fixable problems put you off un-necessarily.
3. What have similar houses sold for?
If you ask the agent what price the Vendor will accept you will often get a pretty vague response, especially if the property is marketed as an Auction or Tender because the agent (correctly) doesn’t want to put any buyers off. Instead, you should ask what similar homes have sold for. Any good agent should have recent sales available at their open home and can point out comparable sales in the area and talk about how they compare with the home you are considering. This will give you a much more accurate guide to price and it is based on fact rather than an agent’s opinion.
4. What settlement date are the owners looking for?
If the owner wants to settle in 1 week (or 4 months away) it may mean this property isn’t going to work for you. Conversely if they need a specific date you want to know this up front before you commit to offering.
5. Have the owners invested in marketing?
This is critical. It may seem like a pointless question when you’re buying but the idea is this: You don’t want to waste your time offering on houses where the owner is not motivated to sell. In any market there will be owners with un-realistic expectations who are not in a rush. These are usually the owners who don’t spend money on marketing and hope the agent will miraculously bring them an acceptable offer. If you are chasing this sort of property it can often end up being a fruitful endeavour.
Buy from owners who are committed to selling and have invested in marketing. They are ready to sign an offer and keen to get moving. (Hint: Many of these owners will be selling by way of Auction or Tender).
Till next time…
Real Estate Blogger
QUOTE OF THE WEEK:
“Don’t think of cost. Think of value.”