Buying Tips

Whether you are buying an investment property or a new home to live in, there are some common problems you need to be aware of to ensure your purchasing experience is stress free and risk free. These few buying tips will make you aware of some of the pitfalls and ways to avoid them.

Why Are You Buying?

Think about why you are purchasing the property. If you intend living in the property does it really suit your needs? If you have young children or elderly people living with you, you might wish to avoid stairs and prefer a level block. Do you intend to install a pool in the future? Is the garden too big or too small? Will you need more bedrooms in future? Is it close to schools etc.

Building Reports

Be sure to have reports for building inspection and pest inspection prior to committing to the purchase.

Meet Your Neighbours

If you are buying a villa, apartment or townhouse you may be sharing a common wall with your neighbours. It would be advisable to check noise levels if possible. Try to meet your new neighbours. They may not share the same values as you.

Do Your Research

By researching the real estate market in a area, you will be much better informed on property values. Ask Ziggy Bale to show you some comparable properties which have sold in the area.

Check with Your Local Council

If a property has been renovated recently you might wish to check with the local council to ensure planning or building permits were approved. Deciding how much to offer can be difficult. You might wish to make your best offer up front or start with a lower offer and be prepared to negotiate up. However, purchasers who make higher offers might secure the property without giving you the opportunity to increase yours.

Buying at Auction

If buying at auction you should have:

  • Decided on a definite upper limit within your means
  • Conducted inspections
  • Had legal documents checked by your solicitor
  • Organised a cheque for the deposit
  • Finance approved

When bidding, bid with confidence and authority.

Cooling Off Periods

Note cooling-off periods can be waived subject to certain conditions

Buying at Auction

Your dream home has just come onto the market and with a certain amount of trepidation you realise that it is being sold by auction. You’ve never been to an auction before – never mind purchased a house at one – and you’re a little worried that you won’t know what to do.

How to get a good deal

Make sure you have finalised all important details before the auction date. Extensive preparation is essential to a happy auction experience.

  • Familiarise yourself with the auction process by visiting as many auctions as you can. Ask questions of the marketing agents and find out everything you need to know about bidding.
  • Inspect the property before the auction date. Be objective and make sure you inspect other properties as well. Inspecting other properties means you can make an educated guess as to a fair purchase price. Work out how much you are willing to pay and don’t exceed your maximum on auction day. If necessary, arrange an independent valuation.
  • Make an appointment with the real estate agent and ask as many questions as possible, including bidding strategies.  Also request a copy of the contract, including condition reports, and study it carefully.
  • Visit your lender and finalise any home loan arrangements. A deposit, often as much as 10% of the purchase price, will need to be paid on completion of the auction, so ensure you have these funds available.
  • On auction day, it’s important to remember that while the auctioneer is employed by the seller to get as good a price as possible for their house, they are also there to help you buy the property.
  • Work out your tactics before the auction and stick with them. Your visits to other auctions should give you an insight into bidding tactics, such as changing the increments of the bids away from the auctioneer’s chosen amounts or those of the other bidders. This can intimidate other bidders; it shows confidence and a strategic plan.  More often than not, a confident bidder ends up buying the property!

Vendor, dummy and co-owner bids

The main difference between vendor, dummy and co-owner bids is that dummy bidding in Australia is illegal. A vendor bid is where the auctioneer will place a bid on behalf of the seller with a view to assisting the property reach its reserve price. Vendor bidding can only be done by the auctioneer or another legally permitted person and should be declared as part of this auction’s process before the auction begins.

Alternatively, dummy bidding is just false bids made by non-genuine crowd members. They have no intention of buying the property and are there purely to inflate the price. Unfortunately, some unscrupulous agents still partake in this illegal act so don’t bid until the house is placed on the market as dummy bidding is generally only used until the reserve price is met.

A co-owner is a person who has a financial share in the house, such as a divorced spouse, who wishes to buy out the other owners. Co-owner bids cannot be made through the auctioneer and are not announced during the auction. However, co-owner bids are declared in the rules set out before the auction starts.

How are auctions regulated?

Auctions are a recognised and widely used form of selling. Not just property but livestock, household goods and cars are auctioned, just to name a few. Each state and territory in Australia has their own set of regulations governing auctions, designed to protect both the vendor and vendee.

The Real Estate Institute in each state and territory sets down guidelines detailing their code of practice for the industry. By ensuring your chosen agent is a member of the Institute, you can guarantee a high standard and an auctioneer who will adhere to each regulation.

Not many complaints are made about auctions in Australia, however if you do have any problems, contact the Real Estate Institute in your state who will be able to refer you to the relevant authority. To find your state’s Real Estate Institute visit www.reiaustralia.com.au.

Choosing the Right Property

Location, Style and Size

In choosing the right home there are several factors you need to consider, including:

Location: preferred suburbs and access to schools, work amenities 

Style and size of home: unit, house, duplex and family needs

In deciding on a location, as a local resident Ziggy Bale knows the area extremely well and is also aware of any proposed changes in the area that are likely to affect your investment. However, you should consider factors such as distance from your place of work, nearby educational facilities, availability of recreational facilities, the local town-planning scheme, and the development potential of the land.

When determining the style and size of your home, consider your basic needs, for example:

  • Garage or carport requirements
  • An extensive garden or easy-care surrounds
  • Family living areas: games room, bedrooms etc.
  • Inside and outside entertaining areas
  • Capacity to extend.

The research that you may care to undertake includes obtaining a copy of the Certificate of Title.  This will inform you of any encumbrances that may affect your use of the land or strata entitlement. It is also wise to enquire with the seller’s agent whether the local authority has approved extensions on the property.

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