When we work with our clients as a buyer’s advocate, we have a very basic structure we like to stick with. It involves five simple steps, which anyone can do, all it involves is allocating enough time to do your research and understand the market objectively not emotionally.
First things first, you need to establish your requirements. Think about your short and long-term goals, the reasons why you’re buying, if it’s for your next home or building your portfolio. What suburbs you’re attracted to, which will tie in on whether it’s an investment property or not and speak to financial advisors or accountants about the best way to set things up for the future, have your legal side ready to go and get all your finance in place so you’re ready to buy at the drop of a pin.
Once you’ve sorted out your requirements, the search begins. These days most people do all their searching online through the real estate portals such as realestate and domain.com.au. I think the most important thing here is to figure out how to divide your time and to take in all the information, rather than the face value of photos and attributes. Some agents may not present homes as well as others online, this doesn’t mean the property isn’t perfect for you. Take the time to properly search through and don’t just flick from one to another searching for pretty pictures. Shortlist the ones that tick the boxes and begin booking appointments. You need to go through the process of elimination and inspect as many properties as you can.
Once you hone down onto a property, make sure you do your due diligence. Pay the money for building and pest inspections, send contracts to your conveyancer or solicitor and really conduct the as much research into the vendor as you can, check the title for mortgages and ask a lot of questions about the vendor’s circumstances. A good agent won’t give you much, as they shouldn’t, though sometimes they slip and give you valuable information to give you an idea on how pressured the sellers are. Then it only comes down to the competition to win the property.
Through your research you need to get a better understanding of what has sold around the property to help determine what it’s worth. Don’t listen to what an agent tells you, it’s most likely a lie, and definitely don’t believe what your guy is telling you, because that will probably set a record for the street, only the owner wins there… oh yeah, and the agent. Make sure you do your research and find all the properties that have sold recently in the area that are similar. Get a baseline with price and depending on your short to long term plan, make a limit to what you’ll offer. By doing this, you’ll find that when you miss a property here and there, it doesn’t hurt as much because you made calculated offers.
Once you have completely all these steps, the final is your strategy going forward. If it’s an auction then you are left to the mercy of the crowd. Bid strong and well and only to your limits and not a dollar more. Auctions are about the next best bid, so contain your emotions, don’t bid aggressively and stay close to your competitor pushing for the lowest bids as possible. The lower you can get the auctioneer to take your bids and the tighter you keep them with your competitor, without any emotion shown, the likely chance you’ll wear them out. In an expression of interest, whether it be a running campaign or how a private treaty is handled, make sure you always submit your offer in person. Sit directly across from the agent and just like the auction, drip your offers in. Watch their eye as you lead each offer with “will $xxx buy the property?”. The key to this is making the appointment just before the offers are due so you know the agent has received all or most of the offers. This way you can watch their eyes or expressions and try to get the best understanding where the others have made offers. This strategy will give you the best shot to get the property at the best price for you. Most importantly, always stick with your budget.
In the end, there’s no hole proof solution to buying property. Try to put your emotion aside and do your research. If you overcapitalised on a property, then take long term approach and you will win. The biggest mistakes you’ll make is buying a property emotionally, bid with your head and not with your heart or hire a buyer advocate if you can’t.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.