These few brief hints, in today's fast-paced world, may save you several thousand dollars if you are buying or selling today.
- Use A Lawyer;
- Building & Pest Inspection;
- Valuation;
- Allow for the Hidden Costs; and
- What Price - Pride or Ego.
1. Use A Lawyer
One of the most dangerous acts done by buyers is to sign legal contracts with real estate agents. Agents are rarely interested in the welfare of buyers. Agents are interested in their commissions.
Agents want to make a sale, they do not want to spoil the sale by having the buyers discover that the home is in a flood area or that it has had illegal building work done to it.
Signing a contract with an agent is like going for medical treatment and having the doctor's receptionist do the operation in the stationery cupboard. Take care of your financial health and use a lawyer - and not a lawyer recommended by the person or company who is trying to sell you something.
A good lawyer is a great property investment.
2. Building & Pest Inspection
Ask your lawyer to recommend a reputable and qualified building inspector to check the property - before you sign a contract.
Amazingly, people are more inclined to get a mechanical inspection when they buy a car than to get a building inspection when they buy a home.
If something arises from the report (that was not pointed out to you before you ordered the report), you can go back to the agent (or the seller) and ask for the price to be lowered to compensate for any repairs that are needed.
The few hundred dollars you spend on a building (and pest) report could save you thousands of dollars.
3. Valuation
Do you really feel you have the knowledge and expertise to know if you are paying the right price? What if the price you pay turns out to be $50,000 (or more) than the true value of the property? Will you be okay with this discovery? If not, then hire an independent valuer before you sign a contract to buy.
Again, when it comes to the value, do not listen to the company that is trying to sell you the property. Have you ever heard of an agent saying to a buyer, You are very foolish for paying such a high price.
? Of course not.
An independent valuer is far more likely to be truthful with the price.
4. Allow for the Hidden Costs
No matter what anyone tells you - or no matter what you believe - buying a home is going to cost you more than you think. You will discover fees and expenses that you never knew existed.
To be safe, always allow that you are going to need SEVEN per cent of the price of the property to cover hidden costs. Yes, it's often less. But if you use the seven per cent rule you will end up with more money instead of less.
5. What Price - Pride or Ego?
Before you buy, ask yourself which is more important to you: Having a home that looks great and you worry about the repayments or having a home where you don't have to worry about the repayments?
Always consider buying a smaller home for a cheaper price or in a less salubrious area. It's much cheaper to buy extra beds for visitors than it is to buy empty bedrooms.
Remember, excess debt is a major cause of unhappiness.
