The 7 tips buyer’s need before you start house hunting!

25 Jan

Save yourself time, money and heartbreak now!

For most people, house hunting is an experience you may do once or a few times in life. No one expects you to be an expert at something you do once every ten years.

Most house hunters would agree they wish it took less time and energy to find a new home. Whether you engage a buyer's agent or not, this is what I wish more buyers understood upfront to save themselves pain and agony later on.

What I wish more buyers understood upfront…

Be ready

By all means, browse the market to get a feel for things before you knuckle down. As soon as you are emotionally and financially ready, then BE READY. This means, if you see a property at 10 am Tuesday, you are in a position to have an unconditional offer exchanged by the end of the day. You might not need to move this fast, but you sure as hell want the option to move faster than any competitor.
If you are an indecisive shopper, you may struggle to execute a home purchase in Sydney without the help of a professional.

Have a pre-approval

If you require a bank loan/mortgage to purchase property then ensure you have a pre-approval in place. If not, you are not ready. Understand any key requirements of the pre-approval. Know when it expires.
Have a clear comfort level and absolute max price
Just because you can spend $2,000,000 does not mean you want to. Set out house hunting with a comfort range, and a determined absolute maximum price. These may be below your pre-approval which is fine. If they are above your pre-approval, then your pre-approval is void if you go over the pre approved limit.
Being clear on an absolute max price, based on your financial comfort level, will help reduce financial concerns when you do identify a property you love. If it is above your absolute max price then move on quickly.

Understand that you don't often get cooling off in Sydney

The majority of homes in Sydney are sold via auction where there is no cooling off. If you are purchasing on the market via a private treaty then in 95% of cases you will need to waive your cooling-off rights to purchase. If you purchase off market then in about 50% of cases you need to waive cooling off.
If your mortgage broker or bank is telling you that your loan will be subject to a valuation and this can be done during a cooling-off period - you need to discuss with them upfront the very likely scenario you won't have a cooling off period. This is a common issue where buyers use a broker not based in Sydney who does not understand the local market dynamics.
Quite simply, assume you will never have cooling off and if you do, it is an absolute bonus.

Don't criticise people's homes or belongings while at the open home

If you don't like something about a home, or have a different taste to the person living there, keep this to yourself (at least until you are back in the car). Most owners have friends or family come and browse through the open home and they may report back any unnecessary comments you've made. This may come back to hurt you later on in the negotiations.
If you would relocate a wall, redesign the kitchen, etc then this is fine to talk about as those are generally not interpreted as criticisms.

Don't ask a buyer's agent or sales agent for financial advice

Financial advice can only be provided by a licensed financial advisor, and this is generally not your buyer's agent or the selling agent. If you've decided you have $X to spend on a property and want to buy in Sydney, then absolutely a buyer's agent can help you. We can determine the type of property and area that may provide the best financial opportunity based on property growth and/or yield.
Likewise, if you have money set aside for renovations, then we can guide you on what changes/improvements to a home would net the most value.
However, a buyer's agent cannot tell you that spending $X to purchase the property is the best use of that money for you. In the long run, you may be better off putting that money in shares, in a bank account, or on black at the casino!
Whether or not a property is the right asset class for you to invest in is not advice that a buyer's agent or real estate agent can give you.

Negotiation starts when you walk in the door

A lot of buyers don't realise this but when the agent asks "What's your current postcode?", "Have you been looking for a while?", "Have you got a pre-approval?" - they are not just making conversation. They have started the negotiation.
They are establishing if you are a motivated buyer, what pressure you might be under to buy, and making assumptions about where your budget might be sitting.
No need to be rude, but remember to hold your cards close to your chest.

It takes time

If you are going it alone, then be prepared that it may take you 9 - 12 months to find the right property and execute a purchase. It will be exhausting and at times frustrating.
If you've engaged a buyer's agent who has validated that your brief is realistic and achievable in the current market, on average, you will buy 4-6 weeks later. For me, having a brief longer than 6 weeks feels like a long time - but my goal is to secure you the right property, and if it takes longer than the average time, that is completely fine.
Be prepared to purchase a property on day 1, but be patient and understand that it may not happen on day 1.

In summary…

Some, or most of these, may seem obvious. If you got this far then hopefully they were at least useful reminders to hang in there. Or win the $100m in Powerball and you can buy what you like!