How to buy a house – Part 4

by Chris Lang on October 7, 2008

Real estate agents activity
In the part three of “How to buy a house” series I covered stage 6 – how to find out what houses are sold in your target suburb and for what price. Knowing that will make your negotiation with the estate agents much easier because it will show them that you know what’s going on and understand the real value and price of the house.

Stage seven – “Action!”

So once you’ve searched the property listings and chosen houses that look suitable to you, it’s time for action – start calling the estate agents to find out the details about those houses, go and inspect them. Don’t worry about having too many on your list – some will get filtered away by inspection, some might be under contract, some vendors won’t like your offer. It’s important to not “lock on” just one house because once you get emotional – you will be in a weaker negotiating position.

A word of advice – when you’re inspecting houses, have a piece of paper with you and make notes about every house. If you want to remember anything at all after you’ve inspected more than 3 houses, making notes is a must, otherwise all the properties and their features will create a terrible mix in your head. Later on when it’s time to compare two houses you’ve inspected 2 weeks ago, you’ll be happy you had that little piece of paper.

Next step is to get Section 32 for the houses you liked – call or email the agent and ask for it. By law you must read this document before you can sign any offer on that property. If you don’t know what Section 32 is – it’s a document listing very important details about the house, such as vendor’s details, title details, what building permits were issued for the house in the last 7 years, what mortgages or debts exist on the property, what covenants/easements are on title to the property, are there connections to gas/electricity/phone line, etc. Section 32 doesn’t make a very interesting reading, so the alternative is to have a lawyer check it (and the contract) and make sure there are no pitfalls (this service is called a “pre-purchase advice”).

After you’re finished with the Section 32 and know everything about the house – it’s time for negotiation (you didn’t think of just paying the asking price, did you?). The asking price is always higher than a fair price and if you’ve done your homework , you know what similar houses sell for in that area. Call or meet the agent, make your offer and wait for the vendor’s decision.

Remember, when buying a house – everything is negotiable, even if the agent wants you to think that your only option is to accept the vendor’s terms. They want to sell just as badly as you want to buy, so negotiate not only the price – but also the terms: how much is the deposit, how long is the settlement, subject to what conditions the contract will be (pest, building inspections, finance, etc).

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