Buying Property For Dummies Read online

  Make a ‘dummy bid’.

  Remain silent when they have a duty to disclose information of relevance to a buyer.

  Agents should not

  Use high-pressure techniques or harassment to further sales.

  Use their inside knowledge to take advantage of consumers, especially the vulnerable.

  You can visit the ACCC website for a copy of the guide at www.accc.gov.au.

  If you come across a situation where you believe a property agent has infringed these rules, your first port of call should be your state or territory consumer agency. See Table 4-1 for contact details of your state or territory office.

  Table 4-1 Contacting Your Local Consumer Agency

  State/Territory

  Contact Details

  ACT

  Office of Regulatory Services www.ors.act.gov.au

  Tel: (02) 6207 0400

  NSW

  Office of Fair Trading www.fairtrading.nsw.gov.au

  Tel: 13 32 20

  NT

  Dept of Justice — Consumer Affairs www.nt.gov.au/justice/consaffairs

  Tel: (08) 8999 1999 or 1800 019 319 (NT only)

  Qld

  Office of Fair Trading www.consumer.qld.gov.au

  Tel: 07 3405 4059

  SA

  Office of Consumer and Business Affairs www.ocba.sa.gov.au

  Tel: (08) 8204 9777

  Tas

  Consumer Affairs and Fair Trading www.consumer.tas.gov.au

  Tel: 1300 654 499

  Vic

  Consumer Affairs Victoria www.consumer.vic.gov.au

  Tel: 1300 558 181

  WA

  Dept of Commerce — Consumer Protection www.commerce.wa.gov.au/ConsumerProtection

  Tel: 1300 30 40 54

  Part II

  Finding Your Dream Home

  Glenn Lumsden

  ‘It’s nice, but we really had our hearts set on something with a giant underground secret cave and connecting bat-poles.’

  In this part . . .

  In this part, you find out about how to search for the home you really want. From using real estate agents and websites to help you with your search to knowing what to look for during an inspection, this part has it all. Investigate the pros and cons of period homes, renovating, choosing a house-and-land package, or building from scratch as an owner–builder.

  Chapter 5

  The Search Is On

  In This Chapter

  Planning your property search

  Homing in on the most likely places

  Gauging short-listed properties before inspection

  Inspecting properties that interest you

  Turning a non-emotional eye on the property

  Having a professional building inspection done

  As soon as you work out what kind of property you’re looking for, you can strap on your boots and start pounding the pavements in the search for your perfect home. Sometimes you can be lucky and find a new home without too much effort but, for most of us, home hunting is a big job that can take weeks or even months. For some people, finding the perfect home at the right price can become something of an obsession that occupies every waking minute (and sometimes invades their dreams as well). I know people who, every weekend, still pore over the property lift-outs — even though they’ve owned their own home for years.

  Whether you’re an obsessive type or a practical type who would rather get the job over and done with quickly and easily, in order to maximise your chances of finding the right property you need to know what you’re looking for, know where to look and be organised in your search. In this chapter, I discuss the different ways in which you can search for your new home and how you can make the whole process easier.

  Setting Up Your Search Strategy

  Before you start looking for a property, work through the features in the checklist of must haves, like to haves and mustn’t haves for your dream home in Chapter 3. Make at least rough notes of the kind of property you’re looking for and some of the important features you hope to find in it. Some preliminary benchmarks are especially important if you’re property hunting with others: Benchmarks help to guide your search strategy and narrow down the number of properties you need to look at. Almost certainly you’re going to change and refine some of your criteria as your search continues, but at least you have something to start working with.

  You should have received pre-approval for a home loan amount before you start your serious search for a new home. (See Chapter 10 for information about housing loans.) When you know how much you can borrow, you have a clearer picture of how much you can afford to spend on your new home — thus saving you the heartache of falling in love with a place only to find that that property is beyond your means.

  Keeping track of all the information

  As you go about your search, you’re going to look at a lot of places. Right from the beginning, setting up a system of recording, organising and tracking the masses of information you collect along the way helps your search. As difficult as it may be to imagine, a time is going to come when the properties you look at all blur into one another. Even if you do a lot of your research and information gathering via the internet (for more on this, see the following section) you’re still going to be accumulating lots of bits of paper, in the form of brochures, newspaper lift-outs and print-outs from websites, as well as your own notes and sketches of floor plans. How are you going to store and organise all that information?

  You can stuff everything into a document wallet, but you may be better off getting yourself a loose-leaf folder and a hole punch, or a display folder with plastic pockets in which you can file loose pages. At the beginning of your records, list your criteria. Then, for each property you look at, allow a page or two of ruled paper to write down some details about it, followed by brochures or print-outs on the property. Properties that you decide probably deserve a second look can get more space, where you can note to what extent they meet your criteria.

  Place the following items in your search folder:

  Auction/sales results for properties that are comparable to the one you’re seeking

  Brochures on individual homes that look promising

  Clippings from newspapers and property supplements

  Lists of homes that are open for inspection each week

  List of your criteria for the perfect home

  Page (ruled) for each home you’re serious about, on which you note how well it fits your criteria

  Print-outs from real estate websites of properties that fit your requirements

  Doing the research

  To maximise your chances of finding the home that best meets your wish list, try to consult every possible source of information on properties that are on the market. That means you shouldn’t just rely on the internet, convenient as it may be, or on referrals from a real estate agent. Be broad-ranging and open-minded in your search and you may well uncover a gem that no-one else has come across.

  Don’t be too anxious about missing out on the perfect property. You’ve got to be a bit philosophical when you’re home hunting — otherwise, you set yourself up for despair. You can only do your best and cover as many bases as you can in the time you have available.

  In this section, I discuss some of the main sources of information about properties for sale.

  Looking at property on the Web

  The internet has revolutionised home hunting. Instead of waiting with bated breath for the midweek and weekend newspapers to come out with the latest batch of available properties, home hunters can now plug in their preferences to a real estate website.

  Real estate websites

  The most popular real estate website in Australia is www.realestate.com.au (sourced from Nielsen Market Intelligence, September 2010). Another popular site is www.domain.com.au.

  These sites include properties to buy, rent or share, as well as information and articles on home buying, renovation and the property market. Here you can search
for properties according to suburb, price, type of property and number of bedrooms. Both websites also allow you to further refine these criteria by desirable local amenities such as schools, parks, entertainment and transport, and by property features such as air-conditioning, built-in wardrobes, and eco-friendly features like water tanks and solar panels. You can also register for email alerts (for free) and enter your preferences and — voilà! — a selection of properties that match your criteria is sent to you via email. If you like the look of any properties on these email alerts, you can click back to the website itself to get more information about them.

  Most of the property listings on websites contain photos and a floor plan of the property. Some offer a ‘virtual tour’ that gives you a 360-degree view of rooms in the property, as well as a map that shows the property’s location. You can zoom in on the address using the satellite view option on the map, which gives you a sense of what the surrounding neighbourhood looks like, what size the blocks are, and whether there are parks — or factories — nearby. Using StreetView or a similar facility, you can even see what the house or apartment looks like from the street, without the ‘glamour-dressing’ used in the agent’s brochures and website photos. Sites also provide open-for-inspection times and the contact details of the listing agent, as well as a link to the website of the real estate agent handling the property.

  If you like the look of a property, add it to the ‘short list’ or ‘saved properties’ function on the website or print out the information on it from the website, as well as the floor plan and map to file in your search folder (refer to the section ‘Keeping track of all the information’ earlier in this chapter).

  Both realestate.com.au and domain.com.au allow you to create a shortlist on the website of properties you’re interested in. On these two main websites, you can also keep track of what’s happening to an individual property by returning to the short list. The short list may notify you that the property has been sold (and sometimes state the selling price, too). You may also see that some properties originally up for auction are now ‘For Private Sale’, which indicates that they have been passed in, and the vendors are now open to offers. (I discuss making offers on passed-in properties in Chapter 11.)

  Apart from the listings themselves, real estate websites are a very handy resource for information about the property market in general, as well as information specific to the suburb or region you’re looking at. ‘Suburb snapshots’ list the latest median prices for the suburb and the kinds of properties there, as well as demographic information on its population. These websites may also contain property market news as well as information about home loans and financing.

  Websites of real estate agents

  Most individual real estate agents also have a dedicated website, some offering a form of email alert. If you narrow down your search to a particular area served by a limited number of agents, this approach can be a good way of getting access to suburb-specific listings. While most real estate agents list their properties with one or both of the real estate websites discussed in the previous section, you may occasionally come across an agent with listings you can’t find anywhere else.

  DIY sites

  Some vendors see the internet as a way to sell their property without having to use a real estate agent. They can do this via a ‘do-it-yourself’ property website (www.diysell.com.au is one example), or by placing a newspaper advertisement and including an internet address where buyers can find more information about the property. To cover those possibilities, you may like to use a search engine such as Google to search your chosen suburbs, adding ‘property for sale by owner’ to the keywords.

  Perusing the property lift-outs

  While property websites may well be your main port of call in your property search, don’t neglect your local and metropolitan newspapers as a source of information and inspiration. A Saturday metropolitan newspaper is the best place to get information on properties that are open for inspection that weekend.

  Newspapers also contain the odd little ad by sellers who aren’t prepared to pay for glossy ads or a website listing. I found out about the house I eventually purchased through a small four-line ad in a metropolitan newspaper. The owner hadn’t put up a ‘For sale’ sign outside the house, so I would never have known it was on the market if I hadn’t scoured the newspapers every day.

  After you narrow down your preferred location, checking the glossy property lift-out from the local newspaper is one of the best ways to get a feel for the kinds of property available in that area. The information in these lift-outs is usually organised according to the real estate agent rather than the suburb, but they often have more information on a property than do the metropolitan papers (but usually less information than the internet) as well as lots of colour photos. Local and metropolitan papers also send reporters to write up more detailed descriptions on selected properties.

  Individual real estate agents, or groups of agents, often issue a weekly property guide to properties on the market in a particular area or region. These guides range from expensive-looking, glossy, bound books to newspaper-style handouts; you can usually find them in a rack outside a local real estate agent’s office.

  If you’re looking for a bargain (and who isn’t?), be aware that the more photos and information a property advertisement contains, the higher the vendor’s expectation of the selling price. It can pay to look out for small advertisements that give the impression that the vendor hasn’t wanted to spend too much money advertising. Potentially, that approach is the vendor’s loss and your gain — the less competition from other buyers, the lower the price a property may be able to command.

  Going through a real estate agent

  If you want a real estate agent to help you, the best idea is to go in armed with a succinct description of the kind of property you’re seeking, and a rough (but not exact) price range you can afford. Then ring back once a week or so and ask if anything is available that fits your criteria. Be polite and undemanding and you may come across an agent who is willing to help.

  Be careful not to become the dumping ground for properties that the agent can’t otherwise sell. Make sure you’re using more than one firm of real estate agents and keep searching yourself at the same time. (For more information on dealing with real estate agents, refer to Chapter 4.)

  One misapprehension of many home buyers is that all they have to do is ring up a few real estate agents in a particular area, tell them what they’re looking for and then sit back and wait for the agent to get back to them with a selection of suitable properties. If you do this, don’t be surprised if you don’t get many calls from the agent. Calls from the agent are more likely if you have more money than the average to spend on a property.

  Checking an area out for yourself

  When you’re on the hunt for a property, you don’t want to leave any stone unturned — particularly the possibility that a property is out there that hasn’t been advertised or listed with a real estate agent. Go ahead and drive around suburbs or particular streets that you like, just in case you spot a ‘For sale’ sign outside a suitable property you didn’t know was on the market.

  Sometimes you may see signs advertising a future auction or private sale. While vendors are unlikely to accept an offer before they draw out all potential buyers with a formal advertisement, you can always mention your interest. Perhaps they need to move in a hurry and would welcome getting a property off their hands quickly.

  Word of mouth

  You have nothing to lose by telling friends and co-workers that you’re in the market for a new home. They may know of someone who wants to sell and who would be happy to negotiate a price with you without having to involve a real estate agent in the process. Friends of mine bought a house this way. The vendors saved several thousand dollars they would have had to pay out in commission and advertising fees, and my friends got a good price for the property.

  However, don’t always assume you’re goi
ng to get a bargain by buying ‘off the market’. Sometimes buying when you know how much other people would be prepared to pay for the same property is better. Neighbours of other friends of mine offered to sell them their house for ‘a very good price’. A bit of research into the local market uncovered that the neighbours’ asking price was no better than the prices being asked for similar properties on the open market.