IN THE KNOW

The 10 ques­tions you must ask be­fore buy­ing

Herald Sun - Property - - FRONT PAGE - PETER FARAGO

KNOWL­EDGE is power in real es­tate, but to get the edge some­times you have to know the right ques­tions to ask.

Real es­tate ex­perts ex­plain that buy­ers who do their re­search can buy bet­ter, es­pe­cially in a hot mar­ket.

Ap­ply­ing that knowl­edge in­volves strat­egy, and some­times that in­cludes glean­ing in­for­ma­tion from the sell­ing agent.

Here are 10 top ques­tions a buyer can ask a sell­ing agent to help work out whether they can make a suc­cess­ful property pur­chase.

WHY ARE THE OWN­ERS SELL­ING?

Ad­van­tage Property Con­sult­ing di­rec­tor Frank Valen­tic said un­der­stand­ing the back­ground of the seller could give buy­ers a clue of how best to struc­ture an of­fer.

“Try and find out the sit­u­a­tion with the sale. What would they take and have they had of­fers, do they have a par­tic­u­lar set­tle­ment,” Mr Valen­tic said.

Property lec­turer and colum­nist Peter Kouli­zos was more blunt: “If the peo­ple are des­per­ate to sell there might be an op­por­tu­nity to pick up a bar­gain or to get some­thing be­low mar­ket price.’’

WHAT ARE THE PRE­FERRED SET­TLE­MENT TERMS?

A quick set­tle­ment might mean the seller was keen to off­load the property and you pick up the sale rel­a­tively quickly, Mr Kouli­zos said.

“If they’re say­ing they’re not in­ter­ested in any con­di­tions then they’re ob­vi­ously very keen to sell,” he said.

“The worst con­di­tion a buyer can put on a con­tract is ‘sub­ject to the sale of my house’, be­cause that could take months. But if the owner is will­ing to ac­cept that, then they must be des­per­ate to sell.”

Mr Valen­tic said not all ne­go­ti­a­tions were about price.

“Find out what’s hap­pen­ing in the seller’s life and it might lead to some­thing where you can ne­go­ti­ate a win-win for both par­ties,” he said.

It could be a big­ger de­posit, re­leased ear­lier, or a par­tic­u­lar set­tle­ment date to al­low the seller to move to new ac­com­mo­da­tion.

HOW MUCH IN­TER­EST HAS THERE BEEN?

A buyer needs to know who they’re up against and whether they’ve had other of­fers.

Mr Valen­tic sug­gested ask­ing how many in­ter­ested par­ties there were, whether they were in­vestors and what was the level of in­ter­est.

“If it doesn’t sound like they’ve got a lot of in­ter­est be­fore auc­tion, you might say let’s run this through and I hope that it passes in,” he said.

“Other times there might be stronger in­ter­est and I might just try and make a solid of­fer be­fore auc­tion.”

IS THE CUR­RENT PRICE THE INI­TIAL ASK­ING PRICE?

“If they’ve dropped the price, then that’s a good thing be­cause you know they’re not to­tally against ac­cept­ing a lower of­fer,” Mr Kouli­zos said.

“But if it’s been on the mar­ket for two months and the price hasn’t dropped then there’s prob­a­bly not much chance to ne­go­ti­ate.”

DO THEY KNOW OF ANY IS­SUES WITH THE NEIGH­BOURS?

They prob­a­bly won’t tell you, but de­pend­ing on which state you are in, an agent can be obliged to re­veal any is­sues if you ask a direct ques­tion.

“They can just as eas­ily say you need to do your own due dili­gence,” Mr Kouli­zos said.

“You have to re­mem­ber the agent is work­ing in the ven­dor’s in­ter­ests. They’re not go­ing to tell you any­thing that’s go­ing to de­tract from get­ting the high­est price un­less they have to by law.”

ARE ANY BUILD­ING RE­PORTS DONE?

A thor­ough buyer would get an in­de­pen­dent as­sess­ment of the home to re­veal any main­te­nance or struc­tural is­sues and also make re­peat in­spec­tions of a property.

But Mr Valen­tic said it was also a way to dis­cover how many other buy­ers were cir­cling. “If they’ve had five or six re­peat in­spec­tions (it’s likely) you’re go­ing up against two or three peo­ple, as 50 to 60 per cent of peo­ple gen­er­ally drop off,” he said.

WHAT’S THE MIN­I­MUM PRICE THE SELLER WOULD AC­CEPT?

“Good luck get­ting any­thing out of the agent but it doesn’t hurt to ask,” Mr Kouli­zos said.

Agents should present all of­fers to their ven­dors, and in some states are re­quired to in writ­ing. “You just never know your luck. Some­body might be very keen to sell, es­pe­cially if there aren’t many con­di­tions, and say, ‘even though the money isn’t as good as I want, I’m go­ing to take it and move on with my life’,’’ he said.

IS THERE ANY DE­VEL­OP­MENT PO­TEN­TIAL ON THIS PROPERTY?

A mo­ti­vated sell­ing agent will understand the de­vel­op­ment po­ten­tial of a property and tell buy­ers, Mr Kouli­zos said.

“The more you know the more likely you are to make an of­fer rather than say, ‘oh cripes, I’ve got to ring the coun­cil about this. It’s too hard, let’s move on to the next property’,” Mr Kouli­zos said.

WILL THE OWN­ERS LOOK AT OF­FERS BE­FORE AUC­TION?

A solid pre-auc­tion of­fer could catch other buy­ers off guard and save hav­ing to com­pete in the heat of an auc­tion, Mr Valen­tic said. But it needed to be en­tic­ing to stop the auc­tion.

“The less con­di­tions you can have in there you might be able to ne­go­ti­ate on price,” he said.

But some­times the best ques­tion to ask was if the ven­dor would ac­cept a for­mal of­fer you just pre­sented to the agent on a signed con­tract.

“Just put an of­fer in and show that you’re se­ri­ous,” he said. “It show’s them the money and that if they coun­ter­sign the con­tract, the deal is done.”

CAN YOU AP­PRAISE MY PROPERTY AS I MIGHT HAVE PROPERTY TO SELL IF I BUY THIS?

This is a cheeky one from Mr Valen­tic. “If you let the agent know that and get them to do a val­u­a­tion on it, po­ten­tially the agent will give you ev­ery chance to buy it, rather than giv­ing it to some­one else. They might pre­fer that you’ve got a trade-in to put into the equa­tion,” he said.

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