Guide To Guaranteeing A Buy Before Auction
Auction day is always very stressful, especially if you have already set your heart on buying the property. Better properties in better suburbs often sell before auction, so how can you guarantee that you’ll secure that perfect property?
- Know what you’re looking for. Establish which suburb and type of property you would like to invest in early on, as this will save time. A defined plan means that you are more likely to find what you want. If you have too many options, you might never make a decision.
- Make sure you know what you’re buying. Once you’ve found your property, a building inspection is imperative to ensure that there are no hidden costs you will have to take care of down the track. It’s also important to have a strata inspection when buying a unit, and a pest inspection, if you’re buying a house. Getting on top of this early will give you a clear idea of any maintenance costs that you need to add to your budget.
- Get your finances pre-approved. Time is of the essence when negotiating a property sale – especially if you leave it until the day of the auction. Many buyers make the mistake of spending months looking for a property only to have your mortgage application rejected. Having preapproved finance gives you the ability to move quickly and lock in a purchase when you find a good property. It can also help to avoid frustration, which may lead to a ‘reactive’ decision on the wrong property.
- Be confident about what it’s worth. Many buyers make emotional decisions when they find their dream property. As a professional buyer, I have been buying similar property in the same suburbs for over 15 years. Even though I have a good idea of what a property might be worth, I still pay an independent valuer every time I bid.
- Build rapport with agents. It’s worth taking the time to build a relationship with a real estate agent. Even if you don’t end up buying the property they are showing you at present, they have a thorough understanding of the market and the property supply and demand in a given area. Likewise, if you’re serious about buying, be sure to let the agent know. As they are the first to be aware of properties for sale, they can give you the chance to see the property first.
- Make an offer. In order to buy before auction, you have to make an offer. Unconditional offers (that are not subject to finance, building inspections, etc.) are always more appealing to vendors. To ensure your offer is accepted, you will need to have a conversation with the agent to discuss the vendor’s expectations. Do they want a long or short settlement? Are they looking to extend their stay in the property?
- Silent sales. Not all properties get advertised on the market – some vendors need a quick sale, a few don’t want to advertise their sale for personal reasons, while others may not need to sell but are open to offers. The better you know the real estate agent, the more likely you will hear about silent sales, as agents often take a property to their closest contacts before the general public.
- Use a professional buyer. Getting advice from a team of professionals such as a buyer’s agent, professional valuer and building inspector will help you find the perfect investment faster. For example, a successful buyer’s agent typically views over 100 properties in the area they are interested in, as well as conducting secondary research, before making a decision. If you’re a time-poor investor, it can be hard to dedicate enough time to inspect a lot of properties before auction, which is why consulting a professional buyer is useful and can help you to better secure you a deal.
About Chris Gray: Chris Gray is CEO of Your Empire, a buyers’ agency which builds property portfolios for time- poor people – searching, negotiating, renovating and managing property on their behalf. Chris’s team buys 1-2 properties a week and often spends $5m+ a year renovating on others behalf, providing a unique insight into market conditions and buyer and seller sentiment. Chris hosts ‘Sky News Real Estate - Smart Investing’ each Monday on Sky News Business channel, where he interviews various heads of property research companies and major industry figures. Chris is a qualified accountant, buyers’ agent and mortgage broker. For more information, visit www.yourempire.com.au, www.chrisgray.com.au and follow Chris on Twitter: @ChrisGrayEmpire