AS A FOLLOWER of our regular updates, you’ll know we always advocate for people to do their homework before making a decision as significant as buying property.

Why?

There is a perceived level of certainty that is widely promoted about ‘bricks-n-mortar’ ownership.

However, in today’s strong property market the potential implications and possible compromises for making such a large financial commitment are often understated and not given the attention they deserve before signing on the dotted line.

Also, property markets are actually quite nuanced which is often overlooked.

So rather than a leap-of-faith or stab-in-the-dark purchase, we like to hear that people are asking lots of questions - because knowledge is power.

Play your cards right

Buying a property is a game of tactics between you and the real estate agent, who is contractually obligated to represent the best interests of their client.

Although legally bound to tell the truth, it doesn’t mean however they will be forthcoming and answer absolutely everything.

But they are also incredibly motivated to sell.  So there may be points along the sales process whereby a real estate agent is willing to provide more of the information you need to make a commitment – especially if their agency agreement is nearing the end for an unsold property.

Either way, you are well within your rights to ask whatever you want.

With that in mind, here are some key questions to ask a real estate agent.

Related Reading: 'How to spot a property hot-spot'

Must-ask questions

Why do you think the house is worth the asking price?

Ask the real estate agent to provide a property sales report that shows what the house is worth and includes the sales results for similar properties in the area for a recent period of time.

Ask the agent to describe the attributes used to decide the asking price.

A lot of free information is also available online.  Another tactic is to ask the real estate agent to comment on the results you have found.

Why is the owner selling?

Knowing the reason behind a sale is a good negotiating tool.  For example, if a seller has already purchased their next property, they may be under pressure to sell.  Alternatively, if they are still looking then you might be able to negotiate a discount for an extended settlement period.

Other questions include how long the current owners have lived there and the owners prior.

How long has the property been on the market?

A well-presented, correctly priced property should sell within 6-8 weeks.  If not, it is safe to assume the asking price is too high or there is something wrong with the property or the surrounding location.

Ask the real estate agent to comment on why they think the property has not been sold yet and if the price has been reduced since it was listed.

Are there any issues with the property, land or neighbouring properties?

Although an independent building inspection is used to identify any existing problems or future challenges, something about the history of the property may be overlooked.  It doesn’t hurt to gain piece of mind by also asking the real estate agent if they know of any issues, prior to signing a contract.

Have any major building improvements been conducted?

If so, it may pay to confirm all relevant planning and building code approvals.  You don’t want to inherit the nightmare of pulling down or rebuilding something that wasn’t approved.

What offers have been received?

Initially the real estate agent may be reluctant to divulge any details, but if the house has been on the market for a while they may indicate the seller’s position.  Some other questions to ask are:

  • Are they willing to negotiate?
  • What is the lowest offer they’ll accept?

Can I speak to the sellers?

The real estate agent won’t be in favour of this, but they can’t stop you.  If the sellers are available to talk, then you’ll get a good feel for the house by having a conversation about likes, dislikes and so on.

Like you, most sellers are not real estate professionals and should be open to an honest chat if they feel that someone is genuinely interested to buy their property.

A gentle reminder

Finding and buying the right house is an emotional time.  Time consuming, frustrating, exciting, and stressful and so on.  There’ll also be a few let-downs along the way.

As you gather more information by asking questions, it’s inevitable your perceptions and understanding will change.

Along that journey our golden rules still apply and it pays to keep asking yourself questions such as the following:

  • Why am I buying a property / what’s my strategy?
    • The answer should be plain and obvious.  If not, step aside from the market and reassess your situation.
  • Am I really happy with this house and it’s location?
    • The market for good houses is highly competitive.  Don’t rush at the next house if things aren’t going according to plan.
  • Can I really afford this house?
    • Have a full understanding of your financial position now and into the future using a few different scenarios e.g. interest rate increase, cost of living increase, loss of job.

In a tough market don’t rush to manufacture a win.

Related Reading: 'Companion documents - the perfect companion'

Dream or dud

Your own research can mean the difference between a dream home or a dud.

Play your cards close and always be on the lookout for more bargaining power.  Remember: real estate agents are acting in the best interests of their client, but there will be times everyone is motivated to sell.

Real estate agents are looking to get a sense of how much you like a property, so act cool if you really like a house and don’t rush.

Do your own research and use the answers provided by real estate agents to compliment this information to build an overall picture of the market.

Are you ready to talk?

When it comes to home loans, there’s no such thing as one size fits all.

It pays to talk to someone that wants to hear your story and run through some different borrowing examples with you. 

Why not incorporate a discussion about property as part of our free, no obligation financial review with one of our experienced and accredited professionals by organising an appointment today.

That’s right.  In a refreshing twist you’ll actually talk to a real person.

It’s just one of the many features and benefits included in a tailored home loan solution from Loan Avenue – affordable home loan solutions for everyday Australians like you.

Let us show you.  To take advantage and make an appointment call 1300 56 26 28 or leave a message here.