Top tips for buying a home: questions you need to ask every real estate agent

There are five key questions every real estate agent should be able to answer, experts say.

It seems FOMO, the fear of missing out, is back in the Australian property market.

President of the Real Estate Buyers Agents Association (REBAA) Cate Bakos said property has turned into a seller’s market once more following a period of downturn.

“We have some property types not doing exceedingly well, but broadly, the market has rebounded,” she said.

While this spells greater competition among buyers, she said there are steps you can take to navigate the market and avoid missing out – or overpaying – as prices rise.

It can be challenging to crack a seller’s market.

WHY ARE PRICES RISING AGAIN?

According to the latest PropTrack Home Price Index, national home values rose 0.14 per cent in April, marking the fourth month of consecutive increase.

PropTrack economist Angus Moore said new listings were down by a quarter compared to the start of 2022.

“Fewer properties hitting the market is helping support prices,” he said.

“Buyers are having to compete for a smaller flow of new homes.”

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It’s easier to sell a property when there are a lot of buyers interested in it.

Having greater competition in the market means instead of negotiating directly with one or two buyers, the selling agent can pitch a whole pool of buyers against each other to achieve the highest price, Ms Bakos said.

This means you need to be ready to pounce.

To prepare, she recommended getting a finance pre-approval and researching what the homes in your chosen suburb are worth – something you can do by keeping a record of what comparable homes are selling for.

“The general public can appraise a property,” Ms Bakos said.

“Selling agents tend not to walk through each other’s properties, whereas a buyer will have explored them all.”

President of the Real Estate Buyers Agents Association of Australia Cate Bakos.

CONSIDER WHAT YOU OFFER

Making an offer can prove a treacherous balance: offer too much and you could risk paying over the bank valuation; not enough, and you could miss out on the property.

“If it’s a seller’s market, that means that prices are going up,” Ms Bakos said.

“You do need to be prepared to have a competitive stretch. But if you pay a price for a property that a bank valuer disagrees with, you’ll have to bridge the difference or you might not get the loan.”

She said it’s important to make any offers in writing – otherwise they may not be taken seriously.

“If you’re making an offer, put it in writing on a contract,” she said.

“Verbals don’t mean anything – that’s the biggest mistake buyers can make.”

Crowded auctions are more typical in a seller’s market. Picture: Darren Leigh-Roberts.

FUTURE-PROOFING

Buyers advocate and CEO of propertybuyer.com.au Rich Harvey said it was important to be selective and “future-proof” your purchase by buying in a good location close to amenities.

“Don’t just buy a property because you’re fed up with looking and you’ve missed out for six months,” he said.

“Buying properties where you can add value, where you can do a renovation, add a bedroom or a granny flat, is a great strategy.”

He said negotiating is a science and an art.

Buyers advocate and CEO of propertybuyer.com.au Rich Harvey.

The science is researching comparable sales while the art is not letting your emotions take over.

He recommended setting a walk away price, especially before an auction.

“It’s really getting a keen understanding of your local market, of the local agents within that market and the dynamics of that local market,” he said.

“It’s also about trying to get a bit of intelligence around where the other buyers are at with their offers. Agents tend to hold a lot of their cards close to their chest.”

Auction clearance rates are up nationally. Picture: Julian Andrews.

QUESTIONS YOU NEED TO ASK EVERY REAL ESTATE AGENT

Ms Bakos said buyers can get a better sense of whether they are getting a good deal by asking some pointed questions when talking with the selling agent.

She recommends asking the selling agent these questions before buying:

1. CAN I HAVE A COPY OF THE CONTRACT?

Agents will only contact those who have expressed interest once they start receiving offers, meaning you won’t get the chance to counter offer if you haven’t let on that you’re serious.

2. HOW IS THE COMPETITION LOOKING FOR THIS PROPERTY?

Knowing how many people have requested contracts or done a pest and building report gives you a better idea of what you’re up against.

Cate Bakos says communicating with the agent is key. Picture: Mike Dugdale.

3. WHAT TERMS COULD I OFFER THAT WOULD APPEAL TO THE VENDOR?

This gives you some intel as to the types of things you could do to sweeten your offer, such as a longer settlement period or the opportunity to rent it back for six months.

4. IS THERE A CHANCE THIS WILL SELL PRIOR TO AUCTION?

This means you can be prepared in case you need to make an offer ahead of the auction date.

5. IF OTHERS MAKE AN OFFER, HOW WILL YOU DEAL WITH THIS?

In the case of private sales, the agent may simply take “best and highest” or do a “back and forth” approach – either one could shape the type of offer you choose to make.

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