5 must have tools you need in your arsenal to purchase property successfully!
Have you been struggling to purchase your next property, feeling like it’s a never ending search? Do you keep getting outbid on the properties you like? Are you sick and tired of dealing with agents?
Today we discuss 5 important tips to ensure you are successful in purchasing your next property! This will save you valuable time and energy and help you feel more confident in the property decisions you make.
It is important to have a clear strategy when you’re looking to purchase a property. Having a clear strategy helps you cull out properties that don’t meet your criteria, needs and price range and helps you create a shortlist of properties that do. This will help save you time and energy and ultimately feel less overwhelmed and better equipped to make a sound investment decision.
A clear strategy will also help you understand the town or city you want to purchase in, narrow down on the suburbs and develop the exact criteria you want to target within those areas. For example, targeting a property in Newcastle looking specifically at the suburbs of Adamstown and Kotara, 3 bedroom, 1 bathroom on a 600m2 block and must generate a yield of 4%.
Relationships With Agents
Fostering strong relationships with agents is especially beneficial in the current market conditions. This increases your chances of coming across off-market properties, which means you may have the option to purchase a property before it goes to market, sometimes even at a lower price than if it did go to market.
Existing relationships with agents also provide an understanding of how they work and operate. Understanding how agents operate means you can accommodate this to make it a more seamless experience for them and they will prefer to work with you over others.
These relationships can also allow you to gain more detailed information on the property, the reason the vendor is selling and what may be important to the vendor when selling. This can be extremely useful in the negotiation phase since, surprisingly, price is not always the single determining factor.
Property Specific Negotiation Skills
You need to have strong negotiation skills specific to the property you are targeting. This means asking quality questions to understand what is important to the vendor and what their motivations are for selling. A highly skilled negotiator will employ various questioning techniques to piece together the required information.
Pest and building reports, particularly on older properties, often come back with various issues and knowing how to negotiate through this process can help reduce the final purchase price.
Being a highly effective property negotiator can be the difference between securing a property or not and reducing the final price you pay for the property.
System to Identify Market Value of the Property
Having a system to identify what the market value of a property is, can ensure you don’t pay more than what the property is really worth. It can also help to identify when a really good deal presents itself, that is, purchasing a property under market value and seeing a capital gain on the way into the deal.
It’s important to pay attention to the finer details and compare comparable properties sold in the area recently to determine the current property value. A great question you can ask an agent is ‘what comparable properties have you used to identify market value and the advertised price?’. This can be a great way to reset the vendor/agent’s expectation if they have overpriced a property.
Having a great system in place allows you to enter negotiations with the highest price you are willing to pay. If the price exceeds what you believe it is worth you simply move on, knowing that another property will become available.
In a hot market it’s okay to pay slightly over market value as some suburbs can be moving $20,000 to $30,000 at a time and that extra $10,000 will soon be under value to the price of the property.
Having a high level of knowledge of an area is key! This allows you to understand the good and bad pockets of a suburb and why. This are knowledge is another way to identify the value of a property in an area.
There are also many data points that you can look at to understand an area – this is more important when you are looking to purchase property as an investment. This includes looking at vacancy rates, last 12 months, 5 years or 10 years of growth, vendor discount rate, median price and median rental yield just to name a few.
There are also due diligence measures to analyze before purchasing, such as flood reports and amount of public housing in the area. All of this requires high level knowledge to understand the areas and to ensure you select a quality property that meets your goals.
As a Buyer’s Agency we have these tools dialed in to ensure that we successfully secure high quality properties in great areas of the suburbs we invest without paying over what we deem market value. If you think that we might be able to help you with your property goals please reach out to us at firstname.lastname@example.org and we can have a further discussion on how we could help you with your goals moving forward.