Buying a property can be just as daunting as selling a property, there are lots of questions to ask yourself, the realtor and the seller – whether you are house hunting to see what is on the market or visiting house showings, at some point these will need to be asked, hopefully these 7 must ask questions when buying a property will give you confidence.
Think of this as a “buying a house checklist” to get you started.
- Can you show me a recent property sales report to show what the house is worth?
Property data information can assist you in your research of locations and help you estimate a selling price or determine a budget for buying in a certain area.
The types of property data you require will depend on the kind of information you are wanting to gather, not all sources will be relevant to your due diligence and I highly recommend doing your own research to establish the most suitable data for your needs.
Data available includes:
- Weekly auction results
- Suburb sales
- Street sales data
- Property sales data
- Sales history
- Price estimators
- Market trends
Discovering how much the property you are interested in is worth and a little information about the area you are likely to buy into, can give you a whole world of context into affordability and if you are being ripped off.
- Why is the vendor selling?
It’s crucial to understand what is motivating the vendor to sell their property. Every vendor will be selling for a different reason, the most common scenarios are:
- They want to leave the area to live closer to family or friends
- Up-sizing or downsizing
- Others will be selling due to a change in circumstances such as relocating overseas, divorce proceedings or the property forms part of a deceased estate.
For this reason, understanding why the vendor wants to sell will unlock the mindset and will help you determine three things:
- How much to offer.
- How hard to push.
- What terms to include.
A key thing to remember, a vendor has a financial and emotional stake in their home and their reason for wanting to sell may come with the pinch of regret.
Asking this question could put the ball firmly in your court if urgency in selling the home is of high importance, a vendor who is wanting to sell quickly may be looking for a shorter settlement and be willing to except a lower price.
- How long has the property been on the market?
How long a property has been on the market can paint an important picture, so it is important that you include this in your due diligence.
To find the most credible and reliable information in the property market in the area you are looking to buy, visit your states Real Estate Industry website, for those living in Victoria it is REIV.
Once you have found the average time it takes a property to sell in your chosen neighbourhood, you can then use a calculator such as “Get the House Date” and by copying and pasting the property url into the search function this tool will tell you how long the property has been listed for in total.
A property that truly exceeds the average time spent on market should raise alarm bells and it is usually plain to see why that property hasn’t sold.
- Are there any known issues with the property, land or neighbours’ properties?
There is so much due diligence involved in this question alone it is not surprising a lot of people purchase a property without fully understanding exactly what they are buying into.
Before you buy a home or vacant land, you should be aware of the range of issues that may affect the property and impose restrictions or obligations on you, if you buy it.
A great place to start would be by downloading the Due Diligence Checklist via the Consumer Affairs website.
- Can I afford to buy this property?
The most important factor in determining how much you an borrow is income. Usually it is best if your repayments don’t exceed 30% of your after-tax salary.
When pondering this question, I suggest seeking professional advice from an accountant and ensure your capacity to borrow isn’t hindered by red marks against your credit file.
Requesting a copy of your credit file is free and will provide you with a insight into why you may be getting knocked back for home loans or why you can’t borrow as much as you thought you could.
- Am I happy with this house and its location?
Don’t be tempted to purchase that house because it looks amazing, ensure you think into the future and try to envisage what housing expenses might be like 5 to 10 years ahead.
Is there the possibility that you may want to renovate or develop the property further in the future for changing family needs? Check to make sure the local council regulations surrounding this and will there be any zoning changes to come, that could make your dream home now, not fit for purpose in the future.
Checkout local schools if you have children or plan too. How long does it take to commute to work? What is the local infrastructure like, is it an ideal location for raising a family.
A home is a long-term decision, so do be realistic in your fervour for the house.
- Why am I buying?
According to the psychology of spending there are seven triggers that may prompt a person to feel like buying a property.
- Shoppers High
- The idea of saving
- Retail Therapy
- Perceived value
- Leisure and Boredom
- Panic Buying
We are all guilty of psychological spending, the problem is that real estate agents know it and find ways to play games through creating an emotional connection to a home through home staging and property styling.
It all comes down to understanding your limits and why you are buying that property.
Happy house hunting!
Buyer Solutions have a page dedicated to providing useful links to other professionals such as buyer advocates and the relevant real estate authority in your state if you require further assistance.
If you are a seller as well as a buyer feel free to contact us, to find out how we can assist you in the presale presentation of your property.