Did You Know?
Did you know? Many people get a valuation during the cooling off period, but are unaware that terminating the contract during this time could cost them money. When a contract is cancelled during the cooling off period, the seller has the right to deduct a termination penalty of 0.25% of the purchase price. This is $1,250 on a $500,000 property. Order a valuation before you sign a contract.
Have you tried private sales websites?
There are many private sale websites now in operation. This can save you on the agent’s commission (but will mean more work for you). Some are much better than others, but it is worth a look. Do a google search for “private sale of property” or something similar. Ensure you still engage a solicitor.
When looking for the perfect property don’t forget to:
a) Check with the local council about future plans – infrastructure, public transport and current development applications. Check what new roads are planned and the possibility of resumption. Check for flood prone areas.
b) If the subject property enjoys good views, check that surrounding properties cannot build out your view.
c) Find the next boom suburb – look to the city fringe. Which was the last suburb to take off and research neighbouring suburbs.
d) Avoid properties too close to main arterial roads, adjoining railway lines (but nowhere near a station) and those adjacent to high voltage power lines.
e) Know the best streets in a suburb and where the schools, childcare and public transport is located in relation to these streets. This allows you to jump on an opportunity when it arises.
f) Find a property within walking distance to public transport eg. Two blocks from the railway station and two blocks away from the railway line.
g) Visit the property at peak hour and observe the traffic.
h) If possible, check out the neighbours, ideally between 6 – 8pm and even early morning. Does the next door neighbour rev up his Harley for work at 6.00am every morning?
Be aware of all the costs before purchasing a property
– legal and conveyancing fees
– stamp duty building and pest inspection
– valuation fees
– loan origination fees
– mortgage insurance premium
– fees if using a bank guarantee
– moving fees… just to list a few.
The power of negotiation
a) Don’t be afraid to ask for what you want – even if you think the vendor will consider it ridiculous.
b) Find out as much about the other party as possible. The more you know about the other party, the more negotiating power you have.
c) Try to have all information verified by a third party.
d) Ask the agent what the vendor needs – the vendor may be prepared to lower the price in return for a sooner (or later) settlement date, depending on their requirements. They may be committed elsewhere, or want a longer settlement while completing building of another home.
e) Have finance pre-approved. This may be a bargaining chip if the deal is not subject to finance.
f) When going into negotiations have a backup plan. This means you have options if the vendor does not accept your offer.
g) Put the vendor under pressure to make a decision by adding an expiry date to your offer.
h) Give yourself room to move with clauses in the contract such as subject to building and pest, valuation or finance. This takes the property off the market while you conduct further research.
i) The key to negotiating is having confidence and the right information. If your options don’t work – maybe it’s best to walk away from the deal.