Cashed up property buyers are starting to see an easing in competition in the current market, but they’ll need more than just money to ensure they set themselves onto a successful financial path.
With the banks increasing interest rates and low stock levels keeping a hold on prices, buyers with a good deposit or solid equity will have the upper hand but will need to be on their game in order to make the most of the opportunity.
Leading Property Strategist, Debra Beck-Mewing, said buyers who are in a position to make a purchase will need to skill up now on key aspects of the buying process to ensure they make good choices.
“We see many buyers who are given loan pre-approval but then burn months and months trying to make a decision. It’s these buyers who then fall prey to the marketeers and spruikers who push them into problem properties as buyers become overwhelmed and worried about missing their market opportunity,” she said.
Many buyers can feel pressured to make decisions quickly which can lead some to make the wrong choice. Buying has never been more complex so a solid level of knowledge is required to operate in the current market. Most buyers will have some knowledge of one aspect of the buying process, but to be successful buyers need to be across all aspects. At a bare minimum, consider the following key tips.
1. It really isn’t all about ‘location’- the most important issue is to ensure your strategy is best for you. Under no circumstances should you be trying to chase ‘hot’ suburbs as this is a recipe for trouble.
2. If you’re receiving ‘advice’ find out how the ‘advisor’ is being paid. If you’re not paying them, then the advice they’re giving you is biased. This is particularly true if the advisor is ‘presenting’ you with a property. They won’t be showing you the full range, only properties where they’re receiving a commission.
3. If you’re paying for a service, ensure you have a written money back guarantee so if anything goes wrong you have an opportunity to withdraw from the agreement and get a refund.
4. Never pay service fees in full upfront. It’s fine to pay an initial component but never the full fee. This should be a rule for life when using services as the service provider will have limited incentive to complete the job well if you have paid the fee in full.
5. The worst type of advisor will charge you upfront and also take commissions. Of course, this is illegal however these bad practices are very prevalent in the current market. Protect yourself by validating any information you’re given. For example check the background of the advisor and any developers connected to the property.
6. Do not rely on ‘research’ that accompanies a property. Check the information with people and organisations not connected to the sale. This is particularly important when considering new, off-the-plan, or house and land purchases.
7. Ensure you are clear on current prices in your target suburbs – look at similar properties on any of the major property portals for a quick sense check.
8. Rental guarantees are a big red flag – they’re usually a rip off and you will pay a higher purchase price for properties with the ‘guarantee’. Any property that needs a guarantee is one that may be difficult to rent, often due to the multitudes of other new builds in the same complex. Usually, the guarantee will only last until the vendor / developer has sold off their interests in the complex.
9. Always check contracts, conduct strata reports and building inspections, and gather as much information as you can before making an offer – use a checklist to increase your efficiency.
10. Anyone talking to you about property should have a license to do so. Check each State/Territory Office of Fair Trading to ensure the license is current.
“Of course, buying a property has many nuances, twists and surprises but if they get it right, buyers can set themselves up for life. This is only achievable if buyers are prepared and organised.
“It’s easy to become overwhelmed, but we see how quickly buyers increase their confidence when they become clear on their target and have an understanding of the process. After buyers have the knowledge, it’s much easier to make decisions and actually buy a property but in the current market they will need to be pro-active”, she said.
For those people who want to make their purchases unaided, a range of guides are available from www.propertyfrontline.com.au. For those who would like some affordable independent assistance, the Property Frontline has developed a buyers support system – the Buyer Success Pack. It’s an essential tool for buyers who want the knowledge and support while doing the buying ‘legwork’ themselves.
The Buyer Success Pack is unique in that buyers can obtain information specific to their needs, making it easy to overcome any barriers in the four key elements of the buying process. It includes the following components.
• How to pinpoint your property price.
• What to inspect at your property inspection.
• How to make an offer property sellers can’t ignore.
• How to win your property auction.
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
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Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.