Top 10 House Buying Tips
Friday, April 22, 2016
As one of life’s biggest and most rewarding experiences, buying a house is something you want to get right. Here's the top 10 house buying tips to help you find success in your property investment.
1. Don’t rush in
There's no hurry. Get prepared first.
One thing you can do is a comparative analysis. This means setting a certain time period – say a few months – and gathering up as much data as you can on properties for sale in the area you are looking at.
This should include the area or suburb you are specifically looking into, as well as a few suburbs surrounding.
One approach is to draw up a spreadsheet of features – bedrooms, amenities, size etc – and put in both the ask price and the sale price (where available).
This will not only give you a good understanding of the market, it will give you some figures to let estate agents know you've done your background research.
2. Get finance first
It's generally a big mistake to head into the marketplace before you know your price limit or even whether you have finance.
Agreeing to take a property even informally, pre-contract, can cause problems if you realise you don't have the money to cover it.
For instance, waiting for finance on your dream property can give others who do have finance, a chance to duck in and sign for it while you're in limbo.
3. Read the fine print
Whether you are buying for investment or your first home, the deal’s details should be held up to a strong light.
Contracts have a way of becoming incomprehensible, so make sure you give yourself time to get the fine tooth comb out to investigate every word, assumption, expectation and number.
And find out your rights. Many contracts have an opt out or cooling off period. If they don't then you should ask why and consider seriously whether you still want to sign.
4. Set a ceiling and don't smash it
Just as any home needs a roof, so do those who are buying it – a financial roof that is. It can be easy when the blood is flowing and the auction hammer is dropping to let emotion over-ride the numbers. Don't. Numbers rule.
5. Know the system
This advice builds on the one above.
For instance, know that buyer agents and selling agents are quite different and will have quite different approaches to your business. You need to know which is which.
You should also get familiar with real estate lingo. This can mean actual architectural terms including the fuzzy ones like “renovator's delight”. It’s also worth noting: terms change in different countries – a colonial kitchen in the US is very different to one in Australia.
A good understanding of the real estate market will help you ask good questions and that's vital.
6. Do inspections
Part of your budget should be to pay for home inspections. If you're thinking of bidding for a place or making an offer, it's essential you know about what problems a place may have.
Big problems will, of course, add costs to your household budget and may affect your ability to repay your mortgage. Even small ones may put that new furniture, or pool you were hoping for out of range.
Get a property inspection report first and then see if the vendor is willing to negotiate downwards to factor its findings in.
7. Check on other costs
Buying property includes some costs which should be added onto the actual price. As noted above, inspections should certainly be part of that. Shifts in interest rates should also be factored into your planning and managed as best as is possible. Fractions of a point up or down can make things a whole lot cheaper or steeper than you’d otherwise expect.
Other possible extra costs like commuting to/from work from your new place, school or shops, rates and body corporate fees, utility costs should also make their way onto your budget spreadsheet.
8. Develop your style
What kind of persona do you want to put out there? What is your negotiating approach? How can you do business and feel comfortable with yourself?
To some extent this is about setting some personal values. But it's also about how you feel you can best succeed using your strengths and not having your weaknesses exposed.
9. Give yourself some wriggle room
It is prudent to set a ceiling on your buying price. It's also a good idea to set a floor.
But, sometimes it is worth going outside of the range if a) you can afford to and b) a cheaper home is perfect. You don't want to miss those chances.
So, be a bit flexible and don't be afraid to allow your price parameters some wriggle room.
Discipline still plays its role here though and you should know what price you simply cannot go over, or under.
10. Keep up
There are developments in real estate all the time. So, it pays to subscribe to a news feed on real estate news so that industry and market news is at your fingertips.
Doing so will allow you to act quickly when circumstances require it and to drop in real estate terminology so that agents know you are serious and not to be messed with.
If you're looking to buy or sell give yourself the confidence to talk the talk.
Want more property tips? Visit the Property Planner Hub for videos, articles and more.
Decided to buy? Download our free checklist with tips on buying property.