5 tips for buying like a pro
You might be thinking of buying a new place, or an investment property. So much to consider, but at the end of the day how can you be sure of getting a good deal? No one likes to pay too much, it leaves a bad taste in your mouth - it's called regret, and it lasts a long, long time. So how can you buy like a pro? Here's a few steps you can take that might help you out.
1. Know your purpose. Be crystal clear on what it is you want from this property. If it's an investment, then look at what you need the property to do for you. Is it for your retirement plan? How much cashflow can you spare each month? If it's for positive cashflow, what yield are you looking for? Will you use a SMSF to purchase, a trust structure, or in your own name? If you're not sure, go and get some advice. I'm not talking about your mate at the pub either, pay a real professional for their knowledge. Free advice is the most expensive advice in the long run.
2. Have your team lined up. Know who will be doing your conveyancing, your lending if you are needing finance, your accountant, valuer, inspector (no asbestos please!), tradies for renovations and more importantly, how well do they do their job? There's nothing worse than an incompetent professional, at worst they can cost you the whole deal. I've been stung by penalty interest in the past, and paying for someone else's mistake feels like burning a stack of your own money. You can avoid this completely by having your pedigree ducks all lined up in a row, and keep your stack of cash neatly in your wallet. Highly recommended.
3. Research, and then more research, but don't stall! There's a fine line between knowing enough, and spending too much time in the details. Paralysis by analysis, it's a killer. Many a good deal has long passed the poor soul stuck in front of a computer, looking at the minutiae. Skip this part and you'll almost certainly pay way too much, shooting yourself in the foot before you begin. I've seen thoughtless purchases that have taken years for the market to reach what they paid for it. Meanwhile they've been dwelling in their regret, wondering what they could have done instead. Ah, the road not taken. Information is power, so become familiar with your chosen area and prospective properties well before inspection day. Know the area like a local and you'll avoid the property with the drug house next door.
4. Don't get emotional. Agents can smell it a mile away. They rub their hands together and the games begin. Like a fish caught on a lure, your emotions won't let you get away. You are their dream buyer, and they will play you for every dollar they can possibly get because their client is the seller. The best way to avoid this? Remove yourself and your undying love for the kitchen benchtops, and get a professional to do the negotiation for you. A buyers agent is not only licenced to do this, they negotiate for a living. Their experience will save you bucketloads, whether it's an auction or private negotiations.
5. Don't be afraid to walk away. The more you want it, the more you are invested in it, the weaker your position is. Having the strength to walk away can work in your favour (but this is a judgement call!). Giving the other side a clear line in the sand shows great strength on your part. Know when to hold em, when to fold em. At the end of the day, it's crucial to know at what point are there better opportunities elsewhere? Don't pay too much just because you got caught up in the moment. A professional by your side will keep your feet firmly planted in reality.
Best wishes for your house-hunting,