We ask industry experts to reveal the must-ask questions every home buyer and investor needs to ask.
This is one of the most important questions but many people don’t think to ask it, says Buyer’s Agent Stefan Miraglia, Director of IPC Property in Adelaide.
“You should question the agent on why they think the house is worth what they are selling it for,” Miraglia says.
“Ask them to provide you with a recent sales report that shows other similar properties and what they sold for in recent times.
“You want to make sure the house you are buying is fairly priced compared to the rest of the local market and you are not overpaying.”
2. Why is the vendor selling?
The answer to this question can assist you when negotiating price, according to Buyer’s Agent Deborah West, Principal of SydneySlice Buyers Agent.
“If the vendor has already bought a property they will be more motivated to sell,” West says.
“If they are looking to buy a new property they may like a longer settlement period. Is it a divorce or deceased estate? Often a deceased estate will need to run through to auction.”
Knowing the reason behind the sale is invaluable information to a buyer – make sure you ask.
3. How long has the property been on the market?
If a property has been on the market for more than six weeks, assume it is wrongly priced or there is something wrong with it, West says. The average time a home is on the market in Australia is around a month so if it’s drastically different to that then it’s worth asking why.
“Ask if the property was taken to auction and failed to sell and if so, what happened at the auction. If the property was passed in at auction make sure you ask if the pass-in price was from a buyer or if it was a vendor bid.”
There might be something that you haven’t noticed that could affect the value of the property so it is important to ask the agent if there are any issues that could change your mind.
“Even though your building inspector or conveyancer should help pick up most of the potential issues before settlement, you should ask the agent before signing the contract just in case they can point anything out,” Miraglia says.
While you shouldn’t rely on it and need to do independent research: “Most agents want to act in good faith as they want the sale to go through so will tell you upfront if they know of any issues that may affect your decision.”
Do you research around the surrounding properties to get a good idea of the home’s current issues. Picture: realestate.com.au
5. Can I afford to buy this property?
It sounds like an obvious question. But Miraglia questions how many owner-occupiers and investors actually ask this before buying a house.
“Buying a house is an expensive process and can be quite costly if you have to sell it six months later because you can’t afford the repayments,” he says.
“Remember, the bank might approve you for a certain home loan amount but will this mean you can still afford the same lifestyle you were used to?”
According to Head Conveyancing Specialist of CM Lawyers in Sydney, Alex Sapounas, buyers need to ask themselves “how will I cope with buying the property if interest rates go up by 2%?”
“They need to understand their budget and sit down with their mortgage broker or bank to fully understand their financial position,” Sapounas says.
6. Am I really happy with this house and its location?
Buying a house is super exciting but can also be stressful and time-consuming. And that can make buyers vulnerable to making mediocre choices.
“Spending weekends going to open inspections is challenging and after potentially missing out on a few houses, you might jump at the next one that comes along and find yourself hastily signing a contract,” Miraglia warns.
“It’s important to strongly consider your decision to sign a contract on a house and make sure that it is the right house for you, not the house that is right now!”
7. Why am I buying?
It’s often the simplest questions we forget to ask ourselves. If you don’t know the answer clean and simple, it is not time to buy a property.
“Will it be your own home or will it be an investment? It is very important to know the answer to this question,” Sapounas says.
“If it will be your own home then its price will become secondary to finding the right features and location for your budget.
“If it will be an investment then the price is everything because that will determine its return.
“I have bought investment properties I would never live in myself but their figures stack up; likewise many $3 million houses would make poor investments because their yields would be very low.
“It is crucial to know why you are buying – you usually cannot have both in one property.”