Common Mistakes By Property Buyers
Everybody makes mistakes, even the experts, but it is important we minimise the mistakes we make and learn from them. Here are some common mistakes that people make when looking to buy.
1. Too Quick to Quit
We’ve seen it many times with newbies. They decide to buy, start to look, can’t get what they want after 4 weeks of looking and then give up. Our recommendation? If you are new to a location or new to buying, allow a minimum of 3 months for research. Attend open houses, auctions and converse with agents every week. Concentrate on one or two postcodes so as to not spread your resources and time too far. This way, after 3 months you will be able to recognise a bargain the moment it presents itself.
To learn how best to research the right deal for you, click here.
2. Don’t make offers
Too many times we have heard people complain that they haven’t been able to buy a property, or that everything is too expensive. Then you ask them ‘how many offers have you made?’ and the answer in most cases is none. Here’s the thing. If you don’t submit an offer, you’ll never buy the property!
Do your sums and if you like the property, submit an offer where you think it is worth. The offer may be well below the asking price, but who cares? You don’t want to be paying more than it’s worth, so put the offer in where you are comfortable. On a similar note, some choose not to put in an offer when there are already offers on the table. Again, if you don’t put in an offer you have 0% chance of buying it. If you put in an offer you at least have some chance.
The Reno Kings are experts on finding bargains. To help you do the same, click here.
3. Wrong form of offer
It isn’t always possible to avoid it, but where possible, submit your offer in contract form, not on an ‘Expressions of Interest’ form or ‘Intention to Purchase’ form. These forms are used by agents where they expect numerous offers (and it saves them from drawing up multiple contracts) or where they are lazy.
The reason for submitting an offer on a proper contract is simple. If your offer is submitted on a contract and someone else’s similar offer is submitted on a single piece of paper, yours will be accepted before the other because it just requires a few signatures and it is done. The other offer still requires a formal contract, even if there is a space to sign on the single piece of paper.
For more information on the no fuss way to present your offer, click here.
4. Listening to the agent
The worst person to get advice from is the sales agent. They are working for the seller and it is in their interest to talk up the property and positives and talk down the negatives.
A perfect example is an agent who informed us that four townhouses could be built on a site I was inspecting. The real number was two. I asked where she received her information… was it a planner? Council? Architect? Research? No. It was from a builder who had inspected the property the day before.
To know which key questions to ask your agent, click here.
5. Inspecting the inside first
We always inspect underneath the house (if highset) and the outside first. We are looking for structural damage and if we see a significant amount we don’t need to look inside! Too many people glance at underneath and spend most of their time inside. Almost as many don’t even inspect underneath the house.
For more information on what to look for when inspecting a property click here.
6. Wrong research
There are heaps of things you need to research when buying a house. We have a 36 Point Checklist. We have never understood why people spend more time and effort researching their next car purchase than they do their next house purchase. One common mistake is to place more emphasis on the building and pest inspection but don’t research the zone, pipes, flooding… in other words the land. The land goes up in value, the house goes down in value, so it is far more important to research the land than the house.
Another common error is to rely on the solicitor’s searches into the land. The problem here is you often only receive them after you have gone unconditional and the solicitor rarely explains the searches to you. There are no guarantees they have done all of the important ones either. How many times do they suggest a search into main roads even though your property is nowhere near one, yet they don’t do a free flood search?
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