With interest rates cut this week to a fresh record low of 1.5 per cent, it’s never been a more attractive time to start climbing the property ladder.
In response, REBAA has put together the top five questions home buyers should ask before jumping in.
Put simply, the questions every buyer should ask a real estate agent are the questions that the average buyer wouldn’t readily know the answers to.
Practical considerations can impact greatly on the selling price and its potential resale value should be considered prior to purchase.
The important thing to remember in a competitive market is not to let emotion take over and overvalue the property. You don’t want to be left with a property that is not going to be suitable for your needs long-term and you certainly don’t want to inherit other people’s problems.
Here are REBAA’s top five questions to ask a real estate agent before buying:
1. How did you price this house?
Typically, houses are much harder to value than units where buyers can easily compare like for like. By asking an agent how they put a value on the house, they are then obliged to provide a list of comparable properties in the area and present their justification for the asking price. As a buyer, your number one priority is to make sure you are not overpaying and getting good value for money. The only way to do this is to research comparable houses and selling prices in the area.
2. How long has this property been on the market?
The length of time a property has been up on the market is a good indication of how ‘stale’ the property may be. A long time on the market means buyers have not viewed it favourably and this could impact on the sale price. Buyers should also ask whether the property has been listed with any other agents prior and whether it has been on the market previously in the past year. This is a good gauge as to whether the property may be overpriced and whether the vendor may be more motivated to sell.
3. When was the last time the property was sold?
The selling history of a house can tell a buyer many things. If it has exchanged owners several times in a short period, this could tell the buyer that there may be problems associated with the house that are not immediately obvious. Some examples of this could be potential flooding, plumbing issues or even bad neighbours. In addition, understanding what it was last traded for, along with the expectation on price, will provide you with insight as to how to the house has performed or not.
4. What are the reasons for selling?
It is always important to know the reason the owners are moving on. Often knowing the reasons for selling can help with the negotiation. If the owners are deemed ‘motivated’ to move on e.g. they have bought elsewhere or they are in the middle of a property dispute, then the balance of power could swing favourably towards the buyer.
5. What improvements have been made to the house and have they been approved by council?
The sales price history of the house may not reflect a recent renovation or extension and therefore this will need to be factored in to your offer price. Likewise, any extension will need to have the appropriate certifications from council. Your solicitor or legal representation should be vigilant on this point and check.