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Ready, Set, Bid !

You have finally made the decision to buy that property you have been talking about and 2018 is the year! There is so much to think about – finance, where to buy, what to buy, how to maximise capital growth, should we use a buyers advocate , how to pay the best price, the list goes on! All of these questions are very pertinent and need to be considered now rather than during the process and before you’re awake at 3am with worry.

The best place to start is with your finances. Figure out if you can afford the intended monthly mortgage repayments allowing for interest rate rises in the future (a good rule of thumb is 2-3% above the current rate). Factor in any future changes you may have in your personal financial position, for example, am I considering having a baby and going on maternity leave? Is my job secure or could I be transferred for work? You will also need to think as a home owner and allow for costs such as council rates, Owners Corporation fees if you buy an apartment and Building Insurance if buying a house.

Once you have a clear picture of how much you can spend, the next step is to speak to a mortgage broker or your bank and put in motion the steps to get pre-approval for finance. Put simply, having lender pre-approval to purchase a property with confidence, even bidding at auction! Bear in mind that your pre-approval will have an expiry period of typically 3-6 months, so if the search process is dragging on, best to re-apply for your pre-approval rather than be caught out with your dream property on the market and lapsed pre-approval.

Selecting the right property can be the real struggle. Is your budget in line with your requirements and taste? We find this is one of the biggest issues particularly for first home buyers. The budget is not suitable for wants/likes. You can go one of two ways, reduce your expectations about the type of property you will be happy to live in or look at suburbs further out but still offering amenities to suit your lifestyle. Suburbs with good access to public transport, major road networks and that have a feature such as beaches, major shopping centres or universities can provide better long term growth potential.

It is important not to overlook properties that upon first online inspection don’t appeal, a few minor cosmetic tweaks and you could be onto a winner! Think ‘The Block’ but on a more achievable level. It is astounding what a few thousand, well spend dollars can do to cosmetically transform a basic apartment or house. Rather than paying a premium for someone else’s renovation, you could reap the rewards by coordinating it yourself and have the satisfaction of giving it your personal touch!

Once you have done the legwork and found a property you are happy to try and purchase, you need to ensure you have done your homework. Market research is imperative to ensure you go into an auction or negotiation with confidence – remember knowledge is power. Attend local auctions of similar properties to see the result and level of competition. Market coverage will educate you on what you can expect to have to pay – just make sure you are comparing apples with apples. Ensure you have had the contract and vendors statement thoroughly checked by a solicitor or conveyancer and arrange for a building and pest inspection to give you peace of mind – minor money to spend when making the biggest transaction of your life!

When auction day arrives or you wish to submit an offer on the property, you need to make sure the agent is aware of your interest. It is a myth that you are best to keep your cards close to your chest when dealing with the agent (except when talking dollars!). Yes, they are working for the seller, but they need to be able to work with you to get the deal done.  When making a private sale offer, make sure you know how the agent is going to handle a situation of multiple parties making offers, what the deadline is and what the asking price is.  All of these things need to be taken into consideration before throwing your hat in the ring.

If the property is to be auctioned, don’t be daunted, treat this as an opportunity to buy the property at a market determined price with no potential of hidden tactics that can be the case with private sale. Set a realistic limit that is not a round number, bid confidently without hesitation and bear in mind that paying that couple of extra bids now could save you time and money than if you are too dogmatic and end up back in the market months from now.

If you feel that professional advice could benefit you, please call +61 3 9018 7870 to discuss how we can help you secure your dream investment or lifestyle property.

About the author

Kristy prides herself on making her clients feel welcome, understood and in safe hands from their very first meeting.  Her 16 years of residential and commercial experience in the Melbourne property market has taught her to ensure every ‘i’ is dotted and ‘t’ crossed and how imperative this is when transacting property. 

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