I have had several conversations with clients who had attempted to transact on a property where things went terribly wrong…
The scenarios often go like this…
1. I found a property that I liked so I made an offer – it was rejected or laughed at…
2. I made a verbal offer, but I wasn’t called back or even kept informed about what was happening with the price
3. I paid a deposit on the property and found out that the property had problems and I lost some of my deposit
4. I paid the deposit on the property, but then I found it had rising dampness and structural problems…and I lost a portion of my deposit
5. I was going to buy this house; I paid the deposit and then did not settle – I lost a lot of money
A lot of these scenarios can be avoided when ‘preparedness meets opportunity’.
No one should be actively trying to purchase a property if they do not know their financial capability e.g. their budget. This means having your funds in place, pre-approval from the bank (that is current), having your stamp duty covered and enough for ancillary costs (legal, moving costs, rate and strata adjustments, and insurance). Having your legal representative established and in communication is also a major advantage.
Many potential purchasers make offers when they are unprepared. Unprepared is not having the items above ready to go, having no idea of the real value of a property, or not making suitable inquiries about the property itself or the contract of sale surrounding the transaction.
Making a verbal offer is non-binding, it won’t stick, and doing so is a waste of time, especially in a competitive market. Doing this may make you feel good but that is about the end of it. Making an offer without your finance in place is just dangerous and reckless – once you have entered the contract (past any cool off period0 you are bound to perform on the terms of the contract. In these cases, you can lose the full deposit amount and if the vendor doesn’t achieve the same price they can sue you for the difference. Making an offer should only be done if you are ready, willing, and able to complete the terms of the purchase.
It is reckless to purchase a property without completing thorough legal and property due diligence. Yet, every year I hear of several cases where this is done. This is an absolute failure in the execution process. When I speak with these people, they soon understand that working with a buyer’s agent this scenario should not EVER happen. Sometimes purchasers must be protected from themselves, emotions can override logic and due process. Often these buyers just don’t know the process or the ramifications and jump into a purchase to find they are in the ‘deep end. Ironically purchasers play roulette with millions of dollars (often borrowed or hard earnt money).
If these scenerio’s were done in the work environment many would be horrified, yet they will do this with their home purchase. This is where emotion can complicate and impede rational and logical decision-making. A buyer’s agent can be a guide to assist you through this and navigate you to a safe acquisition that is a good value where every dollar is spent effectively and won’t be foregone
Using a methodical due diligence approach to the transaction and going with eyes wide open will avoid a lot of complications later. Having a great property team makes the process safe, and efficient, and often saves a lot of money.
Having professionals with areas of expertise means you have your bases covered. Their costs become very cheap compared to a transaction that has gone wrong.
I often hear “why would I need a buyers agent” and it is often from those people who failed terribly in past purchasing attempts. Sometimes it should have been “why didn’t you have a buyers agent?”
The answer to why you should consider one is simple… we can help people to:
1. Save time or leverage their lack of it;
2. Provide expertise in understanding Value both in property pricing and providing transactional experience;
3. The Execution phase – where 85% fail – efficiently executing the transaction to actually acquire the property (strategy, offers, due diligence, exchanges, and settlements)
If you want to minimise your risks, and enhance your chances of buying the right property for the right price then consider an experienced professional fully licensed buyers agent. It can be a false economy thinking you are going to save money doing it yourself – one solid round of negotiation will more than cover costs and one mistake cost you a lot more.
If you would like a strategy call to discuss your situation and get some solid solutions to call Gary on 0425 232 115 or get in touch.
