20 Jun The Top Myths of Buying a Property
I wrote a short blog recently about the myths of selling property so here is the other side of the coin. Here are the myths that we quite often come across when talking to Buyers that are coming through our inspections.
#1 You always need a 20% deposit before buying
It is a great time to buy money with low interest rates and great terms available. The traditional requirement of a 20% deposit is not a must and mortgage insurance can be bought in the event that you can’t quite get to the minimum deposit.
It is worthwhile talking to your bank or mortgage broker when you first start thinking about buying a home. It is not worth missing out on the home you dreamed of because your conditions weren’t desirable.
#2 You don’t need to have Pre-Approved Finance before you make an offer on a property
It is definitely in your best interest to make sure that your finance is in order and ready to go before you start looking at property. I totally understand that sometimes you find something when you aren’t even looking but I guess this is best practice for the optimum results.
When making an offer an Agent and the Seller will look first at the price you offer and second the conditions. Obviously, one of the conditions would be finance.
Now imagine that you had 2 Contracts in front of you for the same amount and one had pre-approved finance and the other not. Which one would you take when you knew one was a sure thing and the other wasn’t?
Go and see your bank and start the ball rolling. It won’t cost you a thing.
#3 You should never buy the first home you see!
This is an oldie but a goodie but is definitely not true. Things are a little bit different from times gone by. Once we decide to purchase a home, we spend our time researching on the internet and know properties so well that by the time we inspect our first home we know everything about it. Provided that you make sure you aren’t blinded by the first impression the property presents and make sure the home has everything that you are looking for, there is no reason why you can’t buy the first home you see.
#4 The home with the best presentation is the best one!
This is definitely not true. While presentation is key to getting a Buyers attention it is no good if the property doesn’t have the goods. I can’t stress enough that you as a Buyer need to look past the perfect presentation that we as Agent’s drum into our Sellers to do when they put their property on the market. Make sure that the property meets all of your needs, well most of them anyway.
#5 When making an offer you should always start with a low offer
Personally, I think long gone are the days that people spend hours and hours haggling over price to finally agree on an amount. Well in truth it does happen, but it is definitely not the norm.
In this day where information is available readily people can be expected to be much more realistic on price whether you are a Buyer or a Seller. You Agent can educate on price by providing a CMA Comparative Market Analysis or giving access to online property data through PriceFinder to determine what properties should sell for. By the way if I can give you some property data access online please let me know and I will hook you up.
You are better off making a reasonable offer from the get go. This keeps the Seller interested and less agitated than if you come in with a ridiculous offer first off. They will be more likely to negotiate a more favourable amount.
Many Agents now ask for your best and final offer especially if there are multiple offers in place. So, have your magic number in mind, listen to your Agents thoughts on where you should be and come up with your first offer then.
As a codicil, make sure your conditions are the best ones you can manage as this will strengthen your offer.
#6 You don’t need home insurance until the house settles
Once you have made an offer on the property and a Contract is signed you really need to arrange some insurance immediately. It can be a bit of a grey area to some but according to Contract Law the property becomes your responsibility from the time the Contract is fully signed and dated. Most insurance agencies will give you a cover note to cover the property until Settlement is affected.
If you find yourself with more questions around myths you may have heard about buying property, please do not hesitate to contact me at firstname.lastname@example.org.