Buying Property For Dummies Read online

  Narrowing Down the Search

  Much as you might want to look at every property with a listing on the market and which seems to meet your criteria ‘just in case . . .’, the reality is that you can devote only so many hours in a week to home hunting, and only so many brain cells in your head to absorbing all the information about prospective properties. Your task now is to pare down the number of properties to a short list of those that you’re seriously likely to consider when they’re open for inspection.

  You can separate the wheat from the chaff if you

  Drive by a property that interests you to check if the streetscape appeals to you, and how well maintained neighbouring properties are.

  Eliminate properties that clearly don’t meet your ‘must-have’ criteria.

  Find out if shops such as newsagents and convenience stores are in the neighbourhood.

  Re-read property advertisements carefully to ensure there’s nothing in them that doesn’t fit your bill.

  See what public transport options are available to residents of the neighbourhood.

  Paring down the properties

  To prevent you wasting your time on unsuitable properties, it can help if you can tell from an ad or a photo whether a property meets your criteria. Some of a property’s features can be quickly ascertained — you can usually find out easily enough whether a property has three bedrooms or a lock-up garage. Other features may require a bit more detective work.

  I’ve been looking for months for a unit for my parents-in-law. They have some very specific requirements, including no shared walls with their neighbours. This feature isn’t always easy to find in a unit and isn’t something you can always see easily from a photo. I’ve learnt to recognise from the floor plan that a wall without windows is likely to be shared with a neighbour.

  Understanding real-estate speak

  You can glean other pieces of information from the language used in an advertisement: A house described as ‘cosy’ is probably small, for instance, and possibly very small. The same goes for ‘compact’.

  Other terms that need careful interpretation include:

  Deceased estate: A property description that includes the term deceased estate means the property is being sold as part of the estate of someone who has died. But the deeper meaning can be that the property hasn’t been renovated for a long time, which could make it a bargain, or a ‘renovator’s delight’.

  Deceptively spacious: This little phrase means a property that looks small from the outside, and is probably small inside, but you may be able to cram more into it than you expect.

  First home buyer’s special: This term is used to describe a property that is cheaper than most homes in the area. This may be because it is small, in a bad location or not in great condition, or that is only suitable for a single person or a couple.

  Has potential: The property needs a lot of work. Watch out for ‘enormous potential’ or ‘huge potential’, which indicate even more work is required to make it liveable!

  Investor’s special: Somewhere you probably wouldn’t want to live yourself! Sometimes this property is an apartment or a unit, and is generally at the lower end of the price range for similar properties in that area. Investors’ specials could have an existing tenant, with a lease, so that it is not available to other occupants for some time.

  Original condition: Means unrenovated. This term suggests there just may be one or two remnants of the property’s period style; they may be in poor condition.

  Renovator’s delight: This description invariably means that the property is a complete dump that only the very brave handyperson should take on!

  Doing the drive-by

  As soon as you put together a list of possibilities from studying the ads, you can further eliminate properties by doing a drive-by. Your aim here is to look at the suburb, the general area and the street itself to get a sense of whether the area is an attractive, or at least an up-and-coming area. Check out what the neighbouring houses are like, and whether the area includes anything, such as a freeway or a factory within metres of the property, that could detract from it.

  When you’re doing your first drive-by, take note of important features in the neighbourhood:

  The streetscape

  Does the street boast shade trees and nature strips, or is it a concrete jungle? Are there parks nearby? Local greenery can make a huge difference to the character of an area. A street lined with trees is pleasing to the eye and somehow conveys a sense of affluence. If you’ve got a dog or kids, a park gives you a destination for walks and games.

  If an area is somewhat lacking in the greenery department, don’t let that put you off it entirely. Our street was rather bare of trees when we first moved in. Four years ago, the council widened the nature strips and planted fast-growing street trees. Their presence has already changed the feel of the area, making it a pleasant place to walk and linger.

  Adjacent properties

  Have a look at the neighbouring houses. What are their gardens like? Are they well cared for? Are the exteriors freshly painted or looking a bit tired? Once you’re really interested in a particular property, you may like to stop and chat with a neighbour.

  When you chat to a local, you kill two birds with one stone — you may well get inside information about the area and the house itself, and you may find out why the current owners are selling up. You may also get a feel for whether the people in the street are the kind you can drop in on to get a cup of sugar or whether you’re expected to keep to yourselves.

  Checking out trains, trams and buses

  Even though Australians are deeply wedded to their cars, if you can find a home that has close access to a train station, a bus route, tram line or ferry wharf, you’re availing yourself and any future buyers of the property of extra options for getting about. Nearby public transport means you and your family may only need one car, and, if you have children, they’re going to be able to get around independently once they’re old enough to travel on public transport on their own.

  Strolling to the corner shops

  Despite the fact that many families do a big weekly shop at a shopping mall, having easy access to a good, local mini-mart, convenience store or milk bar, where you can pick up a loaf of bread or a carton of milk on the way home, is a big plus. Having a nice cafe just down the street helps, too — although the existence of nearby cafes may well add to the purchase price of a home.

  Assessing the Properties on the Short List

  Now that you know a bit more about the properties on your short list, you may find it useful to draw up a kind of checklist to put in your search folder. Figure 5-1 is an example of the kind of report you can draw up for each property. To each report, add your own sketch of the floor plan or attach a print-out of it. Also add the advertisements that appear in the print media and, if they’re available, paste in digital photos of the exterior and interior of the property.

  Figure 5-1: Your personal property assessment report.

  Attending an Open for Inspection

  You compile a file of information on a property, drive by it, check out the street and the area, and make your own personal assessment. If all this sparks your interest in taking matters further, take the next step — attend an inspection!

  Working out a schedule of visits

  Hopefully, you can cull your prospective properties down to a manageable number — visiting five open-for-inspection properties in one day is as many as most people can take in before everything starts to blur. So, with the list of the properties that are open for inspection over the next week (you find the list in the local newspaper), get out pen and paper to devise a schedule and plan your journey across town.

  Most properties for sale have set open-for-inspection times — at least one on the weekend, and often one on an evening midweek. If you can’t attend at the set times, contact the agent and request that they allow you to view the property at a time that suits you.

  Most propertie
s are open for inspection for half an hour. Depending on the time it takes to drive (or even walk) between them, you may be able to fit in two property inspections in half an hour. Make sure you have the street directory reference for each property you want to look at to maximise your chances of getting there on time.

  Make a photocopy of the relevant maps in your street directory for each search day (or print out maps from an online source such as Google Maps). Mark with a thick, black, felt pen the properties you want to have a look at and the times they’re open for inspection. You may also want to mark up the route you need to follow when driving between each property you intend to look at that day.

  What to look for during an inspection

  Think of an inspection as taking place at a couple of levels. The first is the whirlwind tour where you march from the front gate to the back of the house, taking a quick look at each of the rooms along the way. People often say they make up their minds about a house within the first five minutes or so, so by the time you get to the back of the house, you’ll probably know whether the property deserves a second look. If you have time, you can start again at the front of the property, checking off its features against your criteria. Otherwise, make a note to yourself to attend a later viewing.

  As you walk in the door at just about any property inspection, the real estate agent is waiting to take your name and contact details. Do you have to give those details? Yes. Under civil law, when an agent holds an open home inspection, they take responsibility for the home while they have it in their possession. There have been instances where burglaries or assaults have occurred in a property that has been open for inspection and the perpetrator has not been able to be identified due to a lack of information. Therefore, a buyer can be refused entry if they don’t provide their name and contact details to the agent. If you’re concerned about privacy issues, you can ask to write your name on a separate piece of paper that no-one else at the inspection can see. If you don’t want the agent to contact you, you can tell them. But you may actually appreciate the agents following up with you to suggest other properties that might be suitable.

  Sussing out the street appeal

  Starting at the front gate, or the entrance to the apartment block if you’re looking at a flat or unit, get a feel for whether this is the kind of home you’d be happy to come back to every day. Don’t be too prescriptive — not every property needs a gate topped with a flowering arbour, or a smart funky lobby. The question you should be pondering is: Can I do something with this property?

  Focusing on the floor plan

  Changing how space flows through a property is a more difficult and expensive process than changing the colour of the walls or the fit-out of the kitchen. If the floor plan doesn’t suit you, think of ways in which it can be improved. Remember that structural changes cost a lot of money, and also disrupt your life for possibly months on end. However, if you believe the property has possibilities, you may want to buy it to live in until you have the time or money to get it to work better for you.

  Letting in the light

  The ideal is to have a home where the windows in the main living areas face north. But natural light works differently in different houses. To get a clear sense of how light works in a place, visit it at different times of the day (if you can). If you’re the type of person who spends a lot of time in your living area, you may want to be sure the property is a light and breezy place for most of the day, not just for a precious hour or so around the spring equinox.

  Be open to possibilities to improve the natural light in a home. The house we bought originally had no north-facing windows. We were able to install two new windows that now flood our living area with light for most of the day.

  Finding room for everything

  If you’re attached to particular pieces of furniture, is the property you’re inspecting able to fit them all in? A friend of mine who collected antique and retro furniture went house hunting with a tape measure to make sure his larger pieces would be able to fit into the available space.

  If space considerations are important, carry with you a note of the dimensions of your bigger pieces of furniture, so you can make a quick calculation and eliminate properties that clearly can’t accommodate them without significant remodelling.

  A requirement for properties to have suitable spots for certain pieces of furniture may significantly narrow your options in a particular area. You may need to make a hard decision: Either you start looking in a different area, which has bigger homes in a price range you can afford, or you cull your furniture collection.

  Having plenty of storage space

  If you can find a home with plenty of storage space, you’re very lucky. While newer homes are more likely to offer plenty of storage, period homes are notoriously skimpy on built-in cupboards. Once again, though, you can look for potential storage spaces. Many older homes have fireplaces with room on either side for built-in wardrobes or bookcases.

  Our home lacked built-in storage except for one rather shallow linen cupboard. The home did have a very high-pitched roof that we were able to later convert into an attic, now as big as a room.

  Taking a Critical Look at a Property

  When you find a particular property that fits most of your criteria, your best next step is to detach yourself emotionally and look for possible flaws. As perfect or pretty as a property may be, the house or unit may be hiding some major problems that can cost you money and cause you heartache down the track. While you may still go ahead and buy a property with a few blemishes, keeping your eyes wide open as you do it is to your advantage. For example, if you’re negotiating a private sale, you may be able to use the information you glean about any problems in your haggling over the price.

  If you have a parent or friend with some understanding of how buildings work, ask them to accompany you to an inspection. In addition to their knowledge, they’re likely to be more objective than you are in drawing attention to a property’s flaws and shortcomings.

  While getting a building inspection report is a must before you make a serious offer on a property, you can do some preliminary investigations yourself before you go to the expense of employing a professional building inspector. (I discuss inspection reports in the next section.)

  Some of the potential problems that a closer inspection can detect are

  Building out of alignment: Open and close a few doors and windows to check whether the house is out of alignment.

  Cracks in walls: Cracks may indicate subsidence in the earth under the house. Look carefully for cracks that seem to have been painted or plastered over.

  Faulty or substandard wiring: Check the electrical box near the front door. If the box and contents is ancient, it may mean the wiring and switches need replacing.

  Plumbing problems: Turn on a tap to see if you can detect water hammer or discolouration in the water.

  Rising damp: If you notice paint on walls flaking off and a musty smell in some rooms, you may have a problem with rising damp.

  Tree roots causing damage: Large trees planted too close to the building may mean roots can get into the sewers and plumbing pipes. Tree roots can also lift the foundations of the house.

  Getting a Pre-Purchase Building Inspection Done

  If you’re seriously interested in a particular property, your next step should be to engage a reputable specialist to carry out a building inspection. If you buy a property through a private treaty sale, you can add a condition to the contract that makes the sale subject to a satisfactory building inspection report. If you plan to buy at auction, you need to arrange an inspection prior to the auction date. Given that building inspections can be fairly expensive, usually between $300 and $500, you can’t have one done on every single property that interests you.

  Find a building inspector by asking friends or neighbours for a referral, or by contacting:

  Archicentre (www.archicentre.com.au).

  Australian Environmental Pest Managers Associat
ion (www.aepma.com.au).

  Housing Industry Association (www.hia.com.au).

  Institute of Building Consultants NSW (www.ibcnsw.com.au).