Andrew Winter’s top 10 buying secrets
No matter what sort of buyer you are, or what type of home you're looking for, these behind-the-scenes insights from Andrew Winter's three decades as a property expert can help you buy your next dream home.
1. Begin at your lender
Whether you're a first homebuyer, a downsizer, an upsizer or a rightsizer, don't do anything until your finance is in order with your bank or broker. These days they want to know everything about how much you're earning, how much you're saving, what you're spending on and what your lifestyle is like. There's no hiding it anymore. Once you know how much money you have access to, and what you can afford, then you can start looking.
2. Warm up before you start
Spend six weeks studying the market before you get serious. This gives you time to understand all the relevant factors driving prices. Visit open homes, talk to agents and attend auctions so you know what is currently going on. Save your searches on realestate.com.au, subscribe to email lists and listen to feedback. You need to be comfortable with everything - this is the big deal. This way you will feel more confident when the right home comes along.
3. Have a plan of attack
Get to the open home inspections early so you're not pressured, rushed or crowded out. Inspect the property logically. Look around the perimeter, at the gutters, the downpipes, walls, windows, fencing and work your way around each of the rooms, open the cupboards and look at the ceilings. Remember the furniture is irrelevant, the clever buyer takes no notice of that. It won't look like that when you're living there.
4. Work on your poker face
Inspections can be awkward. If you like the home, acknowledge your interest but don't appear too keen. If you tell the agent you love it, you won't have much leverage. Make the agent work for it and give yourself the best chance of the best possible price. Be honest: 'we like it, however we're not ready to make an offer', but don't trip over yourself to get a contract.
5. Mind your (body) language
Give the agent, the auctioneer and the seller nothing! Keep your gestures, emotions and body language in check at all times during inspections, negotiations and auctions. Stay calm. Don't get flustered, frustrated or excited, it won't help you buy the home no matter how much you want it.
6. Ignore historical price growth trends
For the most part, price growth trends are irrelevant. Study what has sold for the past six to 12 months in the areas you're interested in to get a benchmark on prices. A longer term view can be misleading. Just because prices have grown massively in an area for 10 years, doesn't mean it will happen again.
7. Stretch no more than 5 per cent
Ensure your bank balance, not your emotions, guide your purchase. Once you have settled on how much you should pay, including your mortgage, don't pay more than five per cent more. No matter if it is the home you really, really want. Things can get very uncomfortable if you go further than that.
8. Avoid 'off-market' buys.
As an 'off-market' buyer you will struggle to get value for money. You might be dealing with a cocky seller, who believes, or has been told, that because they're doing a secret marketing campaign they'll get a lot of interest. Off-market sellers are also unlikely to take the first offer, which means there's little chance for a bargain and the usual competition between buyers will apply.
9. Don't be scared to open the bidding
Auctions can be intimidating, and no one likes to make the first bid. This can stall the auction completely when no one wants to show their hand first. But if the opportunity is there, put in a ridiculously low bid and see if anyone follows you. They won't get an idea on your limit but you might get an idea of theirs. And if the home gets passed in, you're in the box seat for negotiations with the seller.
10. Buyers' agent are worth considering
Most prospective buyers won't see the need for a buyer's agent. However if you're earning a good income and don't have the time, or perhaps inclination, to look or you're not comfortable negotiating they could be right for you. You're also paying for their market knowledge but it's very hard to prove, as many claim, they have saved you money on the price you have paid.
Originally published as Andrew Winter's top 10 buying secrets