Crucial mistakes too many homebuyers are making

Too many prospective homebuyers are doing things you should never do, if you want to be successful in the search for your next property.

There are several important steps to take before formulating an offer. Picture: Max Mason-Hubers

Making an offer on a home can be a nerve-racking experience, but with a bit of guidance and a few tricks of the trade you can be sure to put your best foot forward.

BEFORE YOU MAKE AN OFFER

Sydney buyers agent Michelle May says before making an offer, buyers should send the contract to their solicitor or conveyancer, have the Strata report reviewed (if buying an apartment) and get a Pest and Building report done.

“It’s really important not to talk any numbers prior to you completing all your due diligence,” she says.

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Make sure you ask the selling agent plenty of questions.

You should also research recent comparable sales before deciding what the property is worth to you in order to get a ballpark range.

“With that, you then go back to your broker,” she says. “They can then do a quick check to see whether the property is potentially on the ‘do not purchase’ list.”

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May also recommends going to see the property a second time to double check its suitability as a home before putting forth an offer. While there, you can gauge how many other buyers are inspecting a second time and ask the agent questions around why the vendors are selling, how long they have held it for and what they paid when they purchased, she says.

Bianca Field from Bought Agency agrees it’s important to ascertain the vendor’s motivation for selling.

Buyers agent Bianca Field from Bought Agency. Picture: supplied

“This will tell you a lot about how to make your offer stronger without increasing the amount you offer,” Field says.

“I would ask the agent, ‘What would buy the home today?’.”

Most of the time agents give a straightforward answer to this question which helps you pin down the viability of the purchase, she says.

She says asking the agent about how many contracts have been issued or how many buyers have inspected can give you an idea about how many others may be making offers.

“If a buyer comes back to see a property more than once and they’ve made contract amendments, typically they’re serious about the property,” Field says.

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Sydney buyers agent Michelle May. Picture: supplied

FRAMING THE OFFER

When it comes to submitting an offer, Field says it’s better to “make it formal.”

“A formal offer means the amendments are marked up in the contract that have been agreed upon between the solicitors, the front page is completed with your name, your conveyancer’s details and the price you’re willing to offer and there’s a signature on the contract,” she says.

She says any other way “leaves the door open and doesn’t allow you the control as a buyer to limit the amount of time it’s going to take you to secure that home.”

If the agent turns a formal offer down, they are required by law to revise their price guide accordingly, she says.

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It’s good to get an idea around how much competition you are facing.

The offer should include the settlement period, whether there is a cooling-off period or not, any amendments to the contract agreed upon plus a deadline for the agent to get back to them regarding the offer – usually close of business on the day the offer is made or the following morning if the offer is made in the afternoon.

“Don’t include any information other than your offer,” Field says. “Any wording can be misinterpreted and if it’s a sensitive situation people can read an offer and take it the wrong way.”

It’s useful to develop a good rapport with the agent.

WHAT TO EXPECT

May says it’s important to understand what the agent will do with your offer before you even submit it. The context around the sale and the way the agent runs the campaign will give you some clues. A sealed bid auction (EOI campaign) is a case in point.

“Is the agent going to do the ring around to all the contract holders,” she says. “Will you get a last right of refusal or will it be one offer only?

“Buying property is like playing chess – you have to understand all the other players on the board.”

Field says when submitting an offer, make sure you ask the agent when you can expect to hear back from them – and avoid hounding them for a response, otherwise you may start to reek of desperation.

WHAT NOT TO DO

When it comes to making an offer on a property, there are three things you should never do, says buyers agent Bianca Field.

* Don’t show emotion – whether you are angry, upset, desperate, exhausted, over it – don’t give any of that away.

* Don’t discuss budget – when looking at a property, don’t reveal to the agent or the other buyers how much money you can safely spend.

* Don’t antagonise the agent – when you are asking questions, don’t rub the agent up the wrong way or they may put you in an unfavourable position when it comes to the competition.

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Originally published as Crucial mistakes too many homebuyers are making