Property Investing/ Property Advice: Series 6 of 7; Series 6: Property Purchase: Part 1

I believe you must engage a Buyers Agent with every property purchase, Using a Buyers Agents/Buyers Advocate and Property Advisor is key to more property investment success. These are extracts from my latest book “The Australia Property Investment Handbook 2018-2019″. In all good book stores now. Also Read Property Finance Made Simple and Property Investing Made Simple. Property investment, using buyers agents/ buyers advocates, is so important, and if looking in Melbourne for example, you should look for Melbourne Buyers Agents or Melbourne Property Advisors. We also service NSW and QLD, so look for Sydney Buyers agents and Brisbane Buyers agents, and QPIA advisors

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Now you have found a property, or your buyer’s agent has found a property or short list of properties for you that suit your plan and property strategy. They have been well researched, finance is pre-approved, you have decided on a conveyancer to use and you have a property inspector in mind. You have spoken to your accountant to advise you if you should purchase the property in your own name or in the name of another entity, such as a company or a trust. Upon deciding which property you want to purchase, you either attend the auction if there is one, or you start negotiating.



If the property is going to auction, it is important to consider a few important things.

Are you confident to bid on your own, or do you require a buyer’s agent to bid for you? There are many games that are played at auctions and you need to understand the rules of the game.

You need to decide on the maximum price you’re prepared to bid, and be prepared to walk away.

If you win at auction you need to have understood whether it is 5% or 10% you pay on the day by internet transfer, evidencing receipt of payment to the agent or bank cheque. You cannot change your mind. There is no cooling off period.

You cannot have a clause in the contract of ‘subject to finance’ nor ‘subject to property and pest inspection’. This leaves you awfully exposed and dramatically increases the risk for you.

What if you pay too much for the property? You may not think it’s too much but what you think does not matter as much as what a valuer will think. I have seen situations where someone is happy with the price they paid, and they attempt to convince the lender of that, but instead of the valuation coming in at contract price it comes back $50k or even a $150k under. A $750k property being valued at $580k is an example of what I have seen. The likelihood of this happening is greater if you have not used a good buyer’s agent or you have purchased from a property marketing company spruiker (alias your enemy).

If it was a new property then it would not be an auction, but the same risk of paying too much applies. People often say the property is worth what someone is prepared to pay; normally the real estate agent says this as a flippant and quite ignorant throwaway line. You won’t be so compliant with this way of thinking if you lose your 5-10% deposit because you cannot settle on the property.

What if the property has some major defects or many smaller but expensive issues you need to resolve upon purchasing it?