Real estate expert advice: How to nail buying a home by private treaty

Auctions might grab the headlines, but a large portion of Australian homes sell via private treaty.

Despite this, industry experts say when it comes to putting in an offer, many buyers are not as prepared as they should be. So what do you need to know?

Do your research

Emily Wallace Buyer’s Advocate owner Emily Wallace said it was crucial for buyers to do their due diligence before stepping foot inside a property.

“Before you’re even in a position to place an offer, in an ideal world you’ll have researched many properties,” Ms Wallace said.

“I would assess about three months’ worth of sold properties that have the same attributes and attend a couple of auctions for similar properties in a similar area, even if you’re buying by private sale.”

Stockdale and Leggo chief executive and director Charlotte Pascoe said attending more than one open home for the same property was essential to “check out your competition”.

“If you go just once, they might all be neighbours. You’re never going to know unless you’re there watching what’s happening in that campaign,” Ms Pascoe said.

Know the numbers

Propertybuyer.com.au chief executive and buyer’s advocate Rich Harvey said a home’s price was often something buyers took at face value.

But Mr Harvey warned the listing price was often below the vendor’s selling point.

“Often the price can be quite low to get people in the door,” he said.

“And the unsuspecting buyer thinks that’s good value – which is why you’ve got to go in knowing what a property is worth.”

Ms Pascoe said that when it came to putting in an offer, interrogating the finer details could help.

“If a home has been on market for a long time, there might be some time to negotiate or the vendor might be getting antsy,” she said.

Understand the process

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Go through everything with your agent or mortgage broker to fully understand what you are getting into.

While real estate agents were governed by state and federal regulations, Ms Wallace said every agency “handles offers differently”.

“For example, some may require a deposit with your offer regardless of if you’re going to be successful,” she said.

“Others may turn it into a boardroom auction.”

Ms Pascoe said speaking to the agent and gaining a feel for their preferences could help buyers better understand how to approach their offer.

Ask questions

Ms Pascoe said the biggest mistake would-be buyers made was not asking enough questions.

“At the open, ask why the vendor is selling, ask about their motivations and understand how the agent will be taking offers,” she said.

“So often it’s about the conditions of the sale, not just the price.

“Some people just want to sell to a nice family.”

Ms Wallace said phrasing traditional questions differently could also help buyers get more information.

“Instead of asking, ‘why are the vendors selling?’, a better question would be, ‘what would suit the vendors’ circumstances?’,” the buyer’s advocate said.

She added that a good offer should strike a balance between what was needed and what was wanted.

Know why you’re there

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When attending a home inspection, make sure you know look over everything in great detail. Picture: Dean Martin

Ms Pascoe said the best advice she gave to buyers was to remember “why you’re buying”.

“If you’re buying with a view that it’s going to be your home for the next 10 to 20 years, then that extra $5000 to $10,000 isn’t going to matter,” she said.

“But if you’re buying it as an investment, if it’s perfect for the demographic you want in that area, don’t get emotional about it.”

Mr Harvey said he encouraged all his clients to “do some future proofing” before jumping in with an offer.

It comes as the latest Proptrack Home Price Index showed national home prices continued to stabilise in April after rising for the fourth consecutive month to 0.14 per cent.

Article source: Queensland Property Investor