It seems incredible that many people in their haste to buy that elusive “Dream Home” that they fail to prepare properly and it inevitably costs them.
Although there are many, many aspects you should consider, in this article I will attempt to raise your awareness to some of the most neglected areas that can have the largest impact on the final outcome of your purchase
- You need to do your research first, make a list of all the reasons why you want to buy, make a list of what you want in a house in order of priority. You need to have a clear understanding of what you need to look for before you start looking. All to often people fall in love with a home because it has the rumpus room for the kids, or the kitchen is just what we’ve always wanted, or it’s already got the double garage and workshop. So many people get trapped into buying for the wrong reasons. Sure its great if you can find a home that has the rumpus room for the kids, but what if its not near any schools, or public transport to get the kids to school every day. You must look at the whole deal not just a small part of it. You are making a huge commitment and it’s very costly if you get wrong.
- For the sake of some basic planning and research you will minimise your chances of failure dramatically. I recommend doing your research on the internet first, here you can find out a huge amount of information about the area, the neighbourhood or community, it helps to visit the area at different time of the week and during the day, even at night, simple things like taking your dog for a walk around the streets, spending a day with you kids in the local parks etc, talk to the locals, the shop keeper etc, find out where the buses or trains run from. All this will give you a much better feel and understanding of where you want to live. Talk to the local council, if there is vacant land nearby, find out what is planned for the site. Would it make a difference to you if it were to be a Hotel and night club or a parking lot.
Negotiating; – You are going to be negotiating possibly the biggest deal of your life, get this wrong and it will cost you thousands, or worse still you could even miss out on the property. Are prepared for this? Can you confidently match your negotiating skills with a seasoned trained and experienced professional like the sellers agent? If you’re not confident then I suggest you consider using a Buyer’s Advocate to negotiate on your behalf. The cost savings they negotiate for you will far outweigh their modest fee. You must also be aware the Realtor is working for the seller at all times
Profiting From The Mistakes Of Others. If you are aware of some facts you can use this information to profit from their mistakes, buy asking questions and doing your research this can give you a huge advantage. I’ll give you some examples.
- The Home is being sold at Auction; This along can be an advantage to you. Did you know that studies have been reported to show that in many instances the successful purchaser when questioned after the sale would have in fact paid more than they did if needed to secure the property. For example; a property went to auction and sold for $232,100. The Reserve price was $225,000. On the face of it this looks like a fantastic deal for the seller. However on questioning the successful buyer, she simply grinned and confirmed she was willing to pay $245,000 to secure this property.
- The difference between Appearance and Reality is significant. While the seller was finally willing to settle for $225,000 (the reserve) but actually got $232,100 On appearance this would seem to be a successful sale. But in Reality the property could have sold for $12,900 more. This is a common occurrence with most auctions. And the fact is the highest bidder only has to go a little higher than the next bidder to win the property. The purchaser in the example above just saved herself $12,900. If this property was for sale by any other method the Seller would most certainly have achieved a much better result.
- During your due diligence (in talking to the neighbours) you found out the seller has committed themselves to another property and desperate to sell quickly. As the buyer you can use this knowledge to you advantage and with some aggressive negotiations you could find yourself picking up a bargain (again profiting from the mistakes of others, the seller should not have disclosed their situation to the neighbour)
- The Seller doesn’t have a current condition report to disclose any defects to you. This is your opportunity to get a condition report done and you can then negotiate a reduction in the price to allow for the repair of the defects found. It is very difficult to argue against the independent expert evidence contained in a condition report.
- The Seller doesn’t understand the true value of the home and the property is “For Sale By Owner”. Selling privately;- there is a perception that you will save on agents commission fees, however this is often incorrect as a skilled agent will achieve a higher price. Another difficulty the seller must face is not being a skill negotiator they are often forced to sell at a much lower price. As the buyer you can take advantage of this and profit from the sellers mistakes.