how to buy a house: finding a property
This is how to buy a house, part 2!
Consider this your property-buying bible! John and Emily, hosts of my millennial property, recorded a 3 episode series outlining the entire house buying process and we think it’s worth sharing! It’s suitable for both first home buyers and property investors alike.
This is part 2 in the series - finding and securing a property:
Follow along our 3 part blog series that outlines everything you need to know!
Line up your professionals
Conveyancer
Don’t go cheap! Choose someone professional and who will perform well. You can use a solicitor, but generally it may be more expensive to go down this road. The choice is yours. Whoever you choose - ensure they’re good at what they do.
Mortgage broker
You should already have a mortgage broking legend on your team, so keep them on call.
Building & pest inspector
These guys can be notoriously busy, so have a few potential inspectors on your list. If an offer of yours is accepted this inspector will need to get there quickly, so be prepared to call them in a hurry. John and Emily recommend that you ensure this inspector is also a registered builder.
Any other inspections that matter to you
There may be other inspections you personally would like done - have them lined up in a similar fashion to your building and pest inspector.
Consider outsourcing
If your time is limited, or the idea of spending time looking for properties stresses you out, consider hiring a buyer's agent or advocate. Use the expertise of a professional. A buyer’s advocate is paid a fee to search for properties on your behalf, and often they utilise their contacts to source off-market properties - those that haven’t been listed publicly - which can really be worth it! Consider if this is an option for you.
Use John’s 100/10/1 rule
John has a rule that guides his search for properties, and it’s a nice way to round up your search - the 100/10/1 rule.
*Find 100 properties (online assessment counts)
*Make offers on 10 properties
*Purchase 1 property
Don’t be too tight with “oh I only looked at 85 properties” - just look at a bunch and you’ll be getting a strong sense for what properties are out there, what the market is doing, and how you can align yourself to get the property right for you.
Look at a breadth of property
Look at properties above and below your budget to get a sense for the spectrum of properties available to you. This will help you recognise when a property is in fact a bargain, or overpriced.
Look at flood zones, easements etc
There are online planning portals for each state and territory that map out things like flood zones, easements, public utilities like stormwater drains, zoning and much more. Use these online sites to get to know properties as best you can before making any offers.
Utilise all online property sites
Download the top real estate apps like realestate.com.au and Domain to create lists of properties you’d like to check out. These apps typically also populate open home schedules for you which can be very useful.
Make yourself known
Agents need buyers! Make yourself known to agents who represent properties you’re interested in - call them ahead of the open home and follow it up with a handshake and smile at the inspection. Show them you’re serious and you may even gain access to properties that haven’t been listed online. Likewise they often have contact lists managed by their internal buyers associates to help sell similar properties e.g. if you’re looking at first homes and you’re on their list, they’ll contact you about other first homes they are managing. Get in the know!
Consider approaching a vendor directly
It may sound wild, but you could consider doing a letterbox drop in streets or suburbs you’re keen on to see if anyone is considering selling soon. Keep in mind that by going direct and dodging an agent, you may face a hefty price tag - the vendor may have overinflated the price without the market knowledge an agent brings. So be prepared for a little bit of negotiating here.
Work at it
Put the work required in every day - keep it consistent. Create a spreadsheet documenting the properties you’re going to look at, what they sell for, and track the trends for the kinds of properties you’re looking at. Often when people say they “can’t find a property” it’s because they’re not putting in the daily elbow grease required to lock something in. Keep at it everyday and you’ll see results.
Auctions vs Private Sales
Now to the actual sale itself - you could be lined up for an auction, or private sale. The rules and processes around these options differ state to state - look into what’s relevant to you. You need to know what something is worth before putting in an offer or bidding. Looking at comparable sales in the area like for like will assist with this.
Generally speaking, although an auction seems daunting, it’s the most transparent sale process as you can physically see everyone who’s bidding in one location and you can respond in real time. You’ve also typically done inspections like pest & building before auction day so you’re informed about the state of the property.
With private sales such as ‘best and final’ and ‘expressions of interest’ you’re going in a little bit blind as to who your competitors are, and particularly with ‘best and final’ offers you could be going in offering way too much! You also haven’t done pest & building inspections yet so you don’t know if the roof is about to cave in. Regardless, the key point is to stick to your strategy and budget. Don’t let the emotion of these processes throw you into a spending frenzy, choose what you’re happy to pay for a property and soldier on, whether you win that property or not.
Quick tips for auctions:
Get your inspections like pest & building done before auction day so you know as much as possible about the property.
Be loud on auction day - there can be hundreds of people at auctions, you need to be heard if you’re bidding. If you don’t have a loud voice, find someone who does to bid on your behalf.
Be bold - Emily likes to stand right up front near the auctioneer to create a little bit of intimidation! Leather jacket and dark sunglasses, anyone?
Be careful - be certain of how much you’re increasing your bids by, and keep a firm grip on your personal price ceiling. Don’t let emotion throw you way off budget.
Go and watch some auctions where you are not bidding before you actually begin bidding at auction. Learn the process and get a feel for the energy.
You’ll need to be prepared with your deposit on the day of the auction if you’re successful.
Quick tips for private sales:
On the day your offer is accepted the real estate agent may ask you for a small holding deposit (not always), followed by the remainder of the deposit within the cooling off period. All the final money involved in the purchase is transferred on settlement day (read part 3 of this blog series for more on this).
check out John’s template for writing up an offer. Some agents are happy receiving this via text message or email - so ask them which they would prefer and what their offer deadline is.
Remember to include any conditions you would like wrapped up in your offer - you will typically want to include a condition around a building and pest inspection (and any other inspections you’re keen on), maybe a settlement period of a certain length and in some cases a finance clause.
Check out this episode where Emily and John walk through the process of making an offer on a property:
Where to now?
Subscribe to my millennial property
Check out Emily’s first home buyer online course
If you’re a property investor, book in a clarity call with John Pidgeon or check out John’s buyer’s agent service, Envisage Property, specialising in purchasing investment properties by creating a thorough strategy based on your long term wealth plan.
