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If you are buying a new home or investment, chances are you will be attending a lot of open houses and meeting a lot of real estate agents.
Finding the right property involves time and research, so you will need to ask the right questions to ensure you are making a competitive offer on a property that meets your long-term needs.
Here we outline four questions you should always ask before you close the deal.
- Why is the vendor selling?
One of the most important questions you can ask is about the seller’s motivation for moving on.Vendors list their properties for a range of different reasons. Some may be tentatively seeing if they can sell their home so they can upgrade, while others will sell due to a change in circumstances such as a new school for the kids, a divorce or a move overseas.If the vendor needs to sell the home quickly, this can give you leverage to negotiate a shorter settlement and a lower price. Some buyers, on the other hand, may want a longer settlement period, and it is good to know their intentions well in advance.
- How long has the property been on the market?
There are a number of reasons a property can take time to sell. The seller could be testing the market, the property may be poorly marketed or perhaps the asking price is simply too high.If a property spends too long on the market, the listing can become ‘stale’, with buyers assuming there is something inherently wrong with the property.If you are interested in a property that has been on the market for a long time, ask the agent about average days on the market in that particular area, if any offers have been made on the property and whether the price has changed since it first listed.If a property has been overlooked because of mispricing, this could present an opportunity for you to negotiate a better price or even make a lowball offer to snag a bargain.
- Are there any known issues with the property, land or neighbouring properties?
As a buyer, the last thing you want is to purchase a money pit with issues you were not expecting. This is why it is important to glean as much information as you can about the property from the real estate agent before you purchase.Ask about previous issues with water damage, foundations, plumbing, wiring, pests and damp. Also look out for defects when you inspect the property – are there cracks in external walls, sagging floors or a musty smell, for example?When you are serious about buying, you can bring in the experts, such as property and pest inspectors and check with the local council for any restrictions or future plans relating to the property. It is also worth visiting the property at different times of day and speaking to potential neighbours about the property and area before you make an offer.
- Can you show me a recent property sales report for the local area?
A real estate agent’s job is to get the best price they can for the vendor. However, it can be useful to question them on why they think the property is worth the asking price.Ask the agent to provide you with a recent sales report that shows what similar properties in the area sold for in recent times. That way you can ensure the property you are buying is fairly priced and you are not overpaying.