4 POWERFUL BUYING STRATEGIES

Don’t Get “Pre-Qualified”

Do you want to get the best house you can buy for the least money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. The way to make a strong offer today is to get “Pre Approved”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. It’s VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.

Sell First, Then Buy

If you have a house to sell, sell it before selecting a home to buy! If you have your eye on another home, pressure is placed on you to sell your existing home sooner rather than later. In the end you will lose money because you accepted the wrong offer and did not wait. Another tactic is to make the Contract “Subject to the seller finding suitable housing”.

Play the Game of Nines

Before house hunting, make a list of the nine things that you want in the new place. Then make a list of the nine things you do not want in your new home. Use this list as a scoreboard to rate each property that you see, the property with the highest score wins!

Don’t be Pushed into ANY House

Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you have seen enough to pick the best one. Check into the school districts of the area you are considering. Information is available on every school such as; size of class, % of students that go to college, OP scores, etc. It is also worth driving around the area to make sure that everything you need access to is conveniently located and that there are a variety of facilities close by.

AUCTIONS: BUYING AND SELLING QUESTIONS AND ANSWERS

Q: What is a Real Estate Auction?
A: Auction is a form of marketing a property through intensive advertising medians designed to capture the maximum attention of buyers within a set time frame. The process is a means of purchasing Real Estate through public negotiations to determine the true market value of the property.

Q: What is the Reserve Price?
A: The Seller usually sets the reserve price on the day of the Auction. The Real Estate Salesperson is unaware of the reserve. The only person who will know is the Auctioneer. The reserve is usually established by the purchaser feedback.

Q: How do we bid at Auction?
A: Simply attract the attention of the Auctioneer by; putting your hand up, calling out, or nodding your head when you catch the Auctioneer’s eye. The Auctioneer usually nominates the amount of the bid he is looking for.

Q: Can I buy before the Auction?
A: Yes. In most cases you can. You simply submit the offer to the agent on a REIQ Contract of Sale and if the price and conditions are agreed to, the Contract is completed and the property sold prior to Auction. In fact 50% of Auctions are sold this way.

Q: I can’t buy at Auction because I have to get Finance
A: That’s OK! You can organise through your bank or building society, approval to bid up to a price you are prepared to pay. The offer would be subject to the Bank’s valuation. This is very simple to organise and only takes a couple of days.

Q: I want to buy it but, I have a house to sell!
A: There are two answers. If you are in a sound financial position you could arrange a bridging loan. The other way is to buy on a longer settlement date giving you time to sell and settle your house.

Q: What price do I have to pay to buy the property?
A: This is the price YOU are prepared to pay. Other people will perceive different amounts. Generally, your price will be established by what property has sold for around the area and also the particular features the home offers you.

Q: What Contract do we sign and what are the standard conditions?
A: The Contract is the standard REIQ contract. This contract is on display at the auction. The usual conditions of purchase are 10% of the purchase price paid as a deposit and the settlement date is usually 30 days from the signing of the Contract.

BIDDING AT AUCTION – How to be a Winner!

Today many property transactions occur at or prior to Public Auction – so bidding at Auctions is something you should make yourself familiar with. Many Buyers are experienced and handle an Auction sale with ease, while other are somewhat unsure about the Auction system.

1. Register Your Interest
If you see a property you’re interested in buying, it’s important to let the agent know. Then you can be sure that you will be advised if any other offers are made by another party prior to Auction day.

2. Preparing for the Auction day
A number of details should be attended to prior to the day of the Auction. It is especially advisable to check all sales documentation relating to the property, as the Contract you will be asked to sign is a legally enforceable document. Other areas that will require attention include:

• Availability of Finance,
• Discussing the property with a Builder or architect,
• Having the Estate Agent asses the value of the property you already own. If you are unable to bid yourself at the Auction, you may have a representative bidder as long as you provide them with a letter of consent.

Arrangements should also be made for the deposit. If successful at the Auction, you must sign the Contract and pay 10% deposit.

3. Set your limit beforehand
Before you get to the Auction you should know your upper dollar limit. Ask yourself how much you really want the property. What is the highest figure you’d pay to own it?

4. Bid Confidently
Buyers often feel they should hold off bidding until the Auctioneer has received the other bids, however such an approach can often work against the Buyer. Unless there is a
need for secrecy bids should be made clearly and confidently. Your hesitation to bid may signal to other bidders that you are nearing your limit. If a property is announced “on the market” during the course of the Auction by the Auctioneer, this means that a definite sale will take place and the Sellers reserve has been met.

5. The “passed in” Auction
If a property is “passed in” this means that the reserve price has not been reached. In most cases the owner, in consultation with the agent, will immediately set the asking price at the reserve figure. It is important to note that the highest bidder at the Auction will have the first exclusive right of refusal to purchase the property at the reserve price. The property is often sold by negotiation immediately following the Auction. So, if you are interested in buying the property, you should ensure if possible that you are the highest bidder. Alternatively, if the highest bidder fails to make an increased offer during post auction negotiations and you were not the highest bidder but if you have some interest in the property, it is advisable prior to leaving the premises to ascertain from the agent the outcome of negotiations with the highest bidder. If you still feel uncomfortable about Auctions, you can always get us to handle it for you. We offer a free Auction purchase service to clients who would prefer to be represented professionally.

THE LEGAL SIDE OF THINGS

WHAT IS CONVEYANCING
For most people, buying or selling a home is the biggest financial decision and the most important legal transaction they will ever make. It makes sense to ensure that this decision is made with good advice. We recommend that as soon as you make a decision to either sell or buy a property, you consult a solicitor. Your solicitor is trained to ensure that you understand the ramifications of buying and selling property. Conveyancing is the transfer of property ownership from one party to another. The exercise is not just a matter of filling out forms. The law associated with conveyancing is complex. If you are buying or selling a house, unit or land, you need to know your rights and obligations in regard to:

Estate agents, Mortgage finance, Vendor’s statements, Contract for Sale, Cooling-off provisions, Guarantees provided in the contract, Requisitions on title, Insurance,  Settlement.

Buying or selling property may affect your taxation position; require you to make a new will and it may have
implication for you in relation to family law.

IF YOU ARE BUYING
You need advice as to whether the contract contains any unacceptable clauses; whether the property is free of encumbrances, whether there are any defects in, or conditions on, the title that will stop you using your property as you want. You should consult your solicitor as soon as you make a decision to purchase a property. It is important that you have someone assisting you who has the necessary legal training to ensure that your interests are protected.