Since 2004 I have been buying property for other people as a job. This job is called a buyer’s agent.
Over this time, I have seen some key things that many buyers do to put themselves at a disadvantage when buying a property. A good buyer’s agent will alleviate these problems, but as a buyer you should still know what they are.
So here are my top tips that you need to know before you buy any property
Research Research Research
Before you do anything, you need to research. Too many people skip this step, and it is to their detriment. Never go property buying until you have done your research on where you want to buy.
There are many resources online and other professionals offline that can help you with the right information and advice for your circumstance.
Companies like www.hotspotting.com.au run by Terry Ryder, Core Logic and a myriad of other publications newsletters and websites have information overload for you to digest, sift through and apply to your situation.
If you need help with researching or applying all the information to your situation, seek the advice of a property investment advisor like Real Property Advice to help you even more.
Make Connections
It is very important to have the right people in your team. This means having those people ready to go before you do anything. It is a bit late to need a good lawyer after you sign a contract or too far down the track to need a building inspector when the building and pest report is due.
Making good connections is not only convenient but an exceptionally smart and wise thing to do. Having your team at your disposal means you can act quickly when needed and to be well planned ahead of time foreseeing potential issues in your transaction. A good property purchase team should include a solicitor, building and pest inspectors, finance broker, insurance agent and a property advisor.
Negotiate well
Negotiation is an essential part of everyday life but even more so when you are looking to buy a property. As a buyer, unless you use an advisor or a buyer’s agent like Real Property Advice, you will be dealing directly with the selling agent who in most cases has many years experience in negotiating property deals.
The average property buyer will buy a property perhaps, four times in their whole life, compared to good real estate agent who sells hundreds and hundreds of properties in their career.
This puts you as a buyer, at a distinct disadvantage in this transaction. If you do not want to use a professional negotiator on your behalf like a buyer’s agent, then the least you can do is get your negotiation skills up a few notches.
In my 16 years of acting for people in property transactions, I would say negotiation is the time at which most people full down or struggle when buying a property. In Australia most people are usually too nice and don’t want to stir up or offend the other side. When in reality, the worst that someone can ever say is no.
Fear is the biggest hindrance in negotiation; what if I go in too low, what if they don’t like what I say, what if they sell it to someone else! All these things play in your mind when you have seen a property and you really like it, and you want to make it yours.
If I had to pick one big key for negotiation as a buyer, I would say, always give yourself the power to walk away and if you need too, do so. Never back yourself into a corner where you cannot walk away until such a time as you are completely happy, then you don’t have to walk away. This means having good contract clauses in place and a good strategy about price.
You talk too much
During the inspection of a property, the real estate agent is watching you like a Hawk. You might think it is to make sure you do not go through the people’s drawers or try and steal their toaster.
In reality it’s to watch your every move including expressions, body language and comments so they grasp what you truly think about the property. When you do an inspection if you can’t walk through with your poker face on then don’t walk through. The problem isn’t when you don’t like a property, the problem is when you DO like a property, and that’s when it all comes undone.
With the agent watching you, and your every move, they have a really good sense of what you truly think.
Remember they do this for a living.
This is not to bag out agents, rather to help you become a better buyer.
When doing your inspection, do not say any unnecessary comments or show to much excitement one way or the other. This includes acting sad about something when in reality you are happy because your body language will give you away!
Keep neutral talk and neutral body language with minimal comments and make sure when you talk to your partner, spouse or significant other, you do so away from the eyes and ears of the agent.
If at all possible, make any comments or responses to the agent and or agency via written text preferably email. This does two things,
1) creates a paper trail of correspondence for you and
2) takes the emotion out of your voice and or body as it is words only.
Have a plan
It does not make any difference whether you are buying for your own home or buying for investment, you will need a plan. This plan will involve the style of property that you are looking to buy, it’s location, the features you are after and of course budget and price.
Preferably this plan would be a written document that you can refer to and compare your notes from your inspections of your properties. A plan is vitally important on many stages of buying a property. It is very easy to get carried away with a ‘pretty’ property, but it could be just that little bit too small or a property with lots of yard, or one that is a money pit of costs and repairs.
Whatever you do has to line up against your plan, to keep you on track and help you make the best purchase possible. It is very easy to write a plan. It does not need to be complicated or long, although if you’re that type of person, you can make it like that. However, I would suggest starting with the things I mentioned above, price, features, location, age and style.
These things will get you on a good path and making a plan around them is relatively easy.
Hot tip – Do not pass your plan to a real estate agent.
Your plan is YOUR plan you don’t need to reveal all your cards at any stage of the journey unless it is going to benefit you.
Financing
Just because you have banked with a bank since you had a childhood account (hello Dollamite account) does not mean they are the right bank for your home loan. It also means that they might be totally fine for your home loan.
In fact, your banking relationship with your current bank has absolutely no beneficial connection to your home loan.
In reality you are starting again. The best way to achieve that is to use a decent broker.
Some banks are better at certain things than others. Some are good at credit cards, some are good at home loans, some are good at everyday banking but one thing is for sure, they all tell you that they’re good at everything.
A decent broker will cut through the hype and fluff and find the best deal for you, your situation and your property purchase at that time in the market. A broker is a key part of your connection team.
Hot tip – The best time to see a broker is BEFORE you start looking for a property.
It is a little bit late when you have been to an open home and signed a contract!
These are my top tips to help you be a better buyer and to achieve a superior outcome on your next property. If you want more information about buying property or our buyers agency service, then contact us here or call now on 1 300 66 7789.
Since 2004 Scotty North has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scott has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model.
Scotty North is a Qualified Property Investment Advisor (QPIA), with accreditation’s in financial planning, mortgage broking and real estate.
By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scott designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.