The Great Australian Dream has long included owning a house (or, in more recent times, even a studio space will do). But sometimes, the dream of finally being able to hang art, paint your walls, and no longer become subject to rental increases can impede our ability to make wise decisions, especially as a first home buyer. If the ongoing statistics about buying a home scare you, according to property expert, and buyers agent, Elaine Davies from New Road Property, successfully purchasing your dream abode (and actually managing the repayments) comes down to asking the right questions in the beginning.
Davies suggests that buying a home works like a "psychological game of poker" and by pressing the owners for more information, you are setting yourself up for a sound investment opportunity, and not simply making a decision based off the postcode, or, the vintage light fixtures. Below, Davies shares the 17 questions she considers for any client before signing on the dotted line.
Why are the current owners selling?
"Are they divorcing, going bankrupt or in a rush to move interstate for a new job? Desperation is a strong negotiation tool! Also, getting a deal done isn’t all about the money. If they don’t have anywhere to go, sweeten the deal by telling them they can stay in the property a little longer."
Has the property changed hands often?
"If the property has changed hands relatively often, raise the red flag! Having said that, it does just happen sometimes, so ask the questions but don’t walk away until you know the whole story."
How many offers has it had?
"It’s in the real estate agent's interest to get a price agreed, so while many won’t disclose offers, they might drop some pretty heavy hints in whispered tones. Finding out about the other offers will help you move forward."
Why did the other buyers pull out?
"Is there something you don’t know about? Sometimes a good property doesn’t sell because of bad luck but most of the time, there’s some fault to be unearthed."
Why have those offers not been accepted?
"If the agent tells you or gives you the feeling that the owners are asking too much, then you’ll know not to get too excited. Stay close but don’t set your heart on an unreasonable vendor seeing sense too quickly. Make sure you’ve done your market research so that you know what the property is worth."
Are they very close to selling?
"If they’ve had an offer accepted and you like the property, you’ll have to move very quickly. Even if you put in a higher offer, verbally or by email, if the other party has got their contract ready, their search is done and they are ready to exchange the vendor may take the bird-in-the-hand."
What renovations have been done? When were they done?
"Are these renovations council approved? If so, are the supporting documents in the contract for sale? If not, why not?"
What renovations would the local council let you do to the property?
"This is one of the times where a real estate agent will naturally turn into Pinocchio. Call council to check what renovations have been done in the street. If a precedent has been set with the council, you should be OK."
What are other local developments in the pipeline?
"Call the council or hop on their website to find out if the local train station, hospital, or school is in danger of closing down. Is the area zoned for commercial use?"
If you can smell paint, varnish or new carpet, are they hiding anything?
"Look under rugs and behind bathroom cupboard doors. Always get a pest and building inspection on a house and a strata report on a company title or strata property which should note all monies spent and upcoming expenditure."
What are the neighbours like?
"The novelty of disputing neighbours from hell could quickly wear thin! Loiter at the weekend and evenings to see what’s happening and also to talk to the locals."
Is the house or unit infamous for anything?
"Again, don’t depend on Pinocchio (the real estate agent). Unearth hidden skeletons by Googling the address. You may not think you care if it was previously a brothel or drug den, but it’s always better to know. When it comes time to on-sell or rent your property, other people may not be as broadminded as you."
What are the inclusions and exclusions of sale?
"In other words what comes with the property and what will the owners keep—assume nothing! If and when you ask for the contract, these should be marked in little black boxes on the front page. If you want something left behind or taken away (think of all the rubbish under the house or in the garage), get it written into the contract before the exchange. Once the deal is done you can’t make any legally binding changes."
When did the owners buy it and how much did they pay for it?
"If it was a short time ago, why are they moving and selling so soon? Do they have noisy neighbours? Is it cold and damp? The estate agent doesn’t have to answer, but if you’re lucky they might hint at the circumstances."
How did the real estate agent come up with the price they’re quoting?
"A good agent will be able to back up their asking price with data of recent sales. Just make sure the sales are recent (6 months isn’t recent) and that they are comparable, not inferior properties."
How long has the property been on the market and how many viewings has it had?
"If the house has been on the market a long time (what equates to a "long time" depends on the local market), ask the agent why they think it isn’t selling. Are there problems that other people have realised that you haven’t? Is it just overpriced? The real estate agent will want to do a deal to get their fee and a long time on the market might mean that the seller would accept a lower price."
What’s the minimum price the vendor will take?
"It sounds counter-intuitive to ask the vendor’s protector this, but it can unearth some interesting insights if you know what to listen for. Don’t forget that it’s in the real estate agents interest to sell and get paid."
For more in-depth property advice, shop Davies book Buy Property Like A Pro.