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Buy well and beat the property boom
ALL the talk of property booms is disheartening for those in the market to buy a home. Buyers can spend months looking for a suitable property, only to be repeatedly outbid by others with bigger budgets. Many feel they may never find a home, but there are ways they can maximise their chances.
Andrew Winter, from television's Selling Houses Australia, believes preparation is everything.
"Sometimes it's the speed with which you can settle," Mr Winter said. "If you do your due diligence; get your building inspector out; engage a lawyer and get finances in place quickly, that can impress in the case of a private treaty."
Auctions can be a lot harder, as anyone who has had their maximum price blown out of the water in the first couple of bids can attest.
"Try putting in the offer prior to auction," Mr Winter said. "You will have to pay at least market value, but it might tempt the seller and the agent, because it eliminates their risk."
Some people get caught up in price guides, which often prove inaccurate.
"Remember they are just a guide and the seller will sometimes guide it low, to tempt you in," Mr Winter said. "If you've done your research, you'll have an idea of what the property is worth to you. If it's next door to mum and dad and you've been waiting 10 years for it to come on the market, you're going to have to pay a little extra to secure it, but don't get carried away."
The most important thing is that buyers only pay what they can afford.
"You have to be brave enough to say it's just not worth it," Mr Winter said. "Mortgage stress can turn a dream home into more of a nightmare."
Flexibility around location is essential to buying within budget, according to Peter Kelaher of PK Property.
"If it's a five-minute drive to the station, instead of a walk, you might pay 20 per cent less," Mr Kelaher said. "Look at properties a bit further away that you can add value to, because there will always come a time when the market pushes outwards."
Sometimes, it can pay to rent a while and wait until supply and demand achieve more of a balance.
"You can get a Mexican standoff where people hold off selling because they won't be able to find something to buy," Mr Kelaher said. "But these tend to break eventually.''
Sometimes, buyers can get an edge if they play nice with real estate agents.
"A lot of people get agents off-side and then egos and emotions get involved," said Nathan Birch, founder of BInvested. "When negotiating, try to understand what is important from an agent's point of view."
Offering a seamless purchase can also give a buyer the upper hand over the competition.
"An agent doesn't want to show you a property 10 times and show it to uncles, aunties, parents and friends, so offer them the path of least resistance," Mr Birch said.
"Someone might say 'I can't see the property this week, because I have something on', but if you're committed, you'll hop in a car, drive to the agent and be ready to sign a contract then and there.
"Agents don't wait while you have a barbecue on a Saturday afternoon; they go ahead and sell the property."
Thorough research on a suburb also helps.
"Look at the data and understand what local properties are actually selling for, then when negotiating, you can say 'the house five doors up sold for this price, but you want me to pay more'?" Mr Birch said. "You have high credibility with an agent if you speak with conviction and know your local market.''
Read more: http://www.news.com.au/realestate/buy-well-and-beat-the-property-boom/story-fncq3era-1226719061546#ixzz2euxIMRs7
Posted by Tim McIntyre - Daily Telegraph on 10th September, 2013 | Comments | Trackbacks
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