Over the course of my career working as a Buyer’s Agent, I have made some observations relating to clients purchasing property for the first time.
We’d like to share some of the rookie mistakes clients can make. These are mistakes that can be easily and very quickly corrected to make a buying experience much more efficient and less stressful and frustrating.
Here are 4 rookie mistakes to be aware of when looking to purchase your first property:
1. Not getting your finance in place
One of the first mistakes first home buyers can make is not getting their finance in place. That basically means working with a banker or with the mortgage broker to get at least a pre-approval rate or conditional approval secured. What that doesn’t involve is jumping online to a lender or bank and simply typing your income details to get instantly approved – when in actual fact you are not.
Starting a property search journey before having financing place increases the risk that you will find a property that you like and you can’t make an offer on it because you don’t have that finance approval. And making an offer to buy a property is extremely risky, because you don’t have the confidence of, or the backing of a lender.
It’s also much more difficult to negotiate to buy property when you don’t have the confidence a loan approval gives you. When you have the loan approval you will know what the lender will allow you to borrow which gives you an idea of what budget you can go to and also gives you the confidence knowing what we have to negotiate with.
2. Having too many criteria
The problem with having so many criteria is it really makes it hard to find a property that checks every single box. As a result, you end up saying no to properties that could well be suitable for you. We suggest breaking down everything that you are looking for and then prioritise this list into ‘must haves’ and ‘nice to haves.’ Aim for four to five ‘must haves’ or ‘deal breakers’. Three to four if that’s possible. The fewer ‘must haves,’ the more properties you will have in your pool to consider. Your property search can become challenging and confusing, particularly if you’re buying as a couple or as a family if you haven’t had that really robust strong conversation as to what your set of criteria are.
3. Not having any criteria at all
When you enquire about a property and particularly when you go to inspect a property, a selling agent will ask you questions with the intention to find out as much about you as possible so they can work out whether you qualify as a serious buyer. This will include any issues and the areas of importance to you when looking at a property. Ultimately, the ideal situation for an agent when selling property is competition. If there is at least two buyers who are serious about the same property – that’s all they need. The agent can then go on to create a competition and drive up the final sale price. When you’re giving an agent information, make sure you give them enough information that allows them to qualify you as a serious buyer for the property.
4. Giving the agent too much information
What should you be telling an agent? First thing they’ll ask you is what kind of property you’re looking for and for what purpose? It could be that you are looking for home to live in and need 3 bedrooms, two bathrooms and some kind of a yard or an outdoor space with a lot of light open plan kitchen, living and dining space. That’s definitely OK information to give and no secret disclosing it. It’s helpful to the agent to provide them with an indication of what kind of property you’re looking for so they can then help you work out the right property for you.
What you don’t want to do is give them an exact number when you are talking budget. Give them a general figure or provide them with enough for them to understand where your budget might lie. For example, if your budget is 1.5 million dollars and an agent asks you about your budget, say something like – “we have a budget up towards the mid $1,000,000 mark potentially up to 1.5m.”
If you’re in the process of getting your finance in place, or you don’t have it, don’t give them all the information. Also don’t tell the agent whether you’ve attended certain auctions or tried to buy other property before, because that will help them work out what kind of budget you are working towards.
If you’re purchasing a Sydney property and would like an expert opinion, advice or the additional fire power of a buyer’s agent, contact the team at Cura Property! We’d love to help you with your search!
Founding Buyers Agent/Director, Cura Property