House-hunting? Then do your homework
Research is vital if you are in the market for a new home.
It's enough to make you take to the couch with a box of chocolates and the remote control. As agents begin listing a bumper crop of spring house sales, those planning to buy can find deciding which to look at and what to look for daunting.
But agents and buyers' advocates agree that doing their homework before setting foot inside an open home is half the battle - and much less stressful.
''If you are thinking about getting into the marketplace, you don't even think about buying anything until you have an understanding of what kind of market you are getting into,'' says Monique Wakelin, of Wakelin Property Advisory. ''Start four to six weeks before you want to put your hand up at any auction.''
Karl Gillon, managing director of Buxton, Albert Park, says looking at quotes in advertisements or asking agents for a guideline is not enough to learn the true value of properties in an area. ''The first thing is they have to do their homework on what properties are selling for,'' he said. He suggests asking selling agents for information about property sales comparable with the one they are selling.
RT Edgar Boroondara director Glen Coutinho says many buyers do not realise how many sales occur off market - that is, they are snapped up by agents' clients before a marketing campaign begins.
''If somebody wants to buy now or get ready for spring, the first thing they should do is talk to a couple of agents they like or trust,'' he says. ''Agents list houses now that don't make it to spring - they sell now through buyers having relationships with agents.
''They should put their name down on the list in case something comes up.''
Coutinho says buyers should continually drive around the streets they want to live in: ''Often a forthcoming auction board will go on the fence two to three weeks before [the sale board], so that gives them a second chance before it goes on the market.''
Wakelin recommends extensive auction research: ''They need to start doing the rounds, even if they are properties they are not interested in. Look at who is going to open for inspections and listen to what agents are telling them and start reading the media about home-buyer reporting. Compare this period data with the same period last year - year-on-year.
''Get a feel for the overall state of the market, but confine it to the general area they are interested in, one or two suburbs. Establish whether what other properties are actually selling for are within your budget to see whether the quoting range is then followed through, and go to the auction - see what it actually sells for and how much competition there is for it.''
Buyers should ask themselves why they are buying - for a home, for lifestyle reasons, for an investment or a combination of both? The answer will determine the features that are important to them.
They need to work out the budget and to obtain finance pre-approval.
And, crucially, buyers need to understand one key fact, Wakelin says: ''The real estate agent is not there to look after them, answer all their questions and be their buddy. They are being paid by the vendor to get the highest price. The person who is paying is the person who is being looked after. Getting angry with the real estate agent is a real waste of energy. There are people out there to help you if you need it.''
Gillon says interested buyers should ask whether the vendor would consider a pre-auction offer - more likely when the market is not booming - while Coutinho recommends saving such questions for a follow-up phone call or private viewing, rather than alerting potential competition at an open home.
''Most people know on the first look they are going to make an offer on the house,'' he said. ''The second look is generally with a friend, family or architect. They should look at the contract to make sure they can do what they want with the property; otherwise they have their second inspection with a builder and find they cannot do what they want to. What they should say to the agent is, 'we have interest in the property, please don't sell it without talking to us'.''
But Wakelin warns questions such as openness to offers and flexibility of settlement period should be asked only when buyers are sure they are very interested in a property. And don't tell the agent how much you have to spend, or give clues by divulging which other properties you have seen, she says. ''You never reveal your hand publicly. The agent is also there to gather intelligence for the vendors.''
And she has a final word of advice which may seem obvious, but it happens: ''Never buy sight unseen. Do not ever drive past an auction at a pretty-looking house, leap out of your car and buy it.''
Finding the right one
- Begin by making lists: your preferred areas, essential features and non-essential features.
- Research market values in your preferred areas.
- Make several visits to a home before deciding to buy it.
- Don't be pressured into making hasty decisions.
- Read and understand all documents before signing. Have all verbal agreements put in writing.
- Consider obtaining independent advice, especially if uncertain about documents and contracts.
- Consider obtaining an independent, professional building inspection report, even if the agent or seller offers one.
- Use an inspection service with full professional indemnity insurance.
Source: Consumer Affairs Victoria
Posted by Sue Green - Domain (The Age) on 18th August, 2013 | Comments | Trackbacks
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