Property

Always do your homework

With the housing market running hot there’s growing numbers of buyers out there and that’s left the Real Estate Authority (REA) reminding them to do their homework.

Tuesday, October 27th 2020

That’s because the REA has seen an increase in calls and complaint enquiries in the three months to 30 September.

Last quarter REA handled 5,844 calls which was an increase of 20% on the same period in 2019. Complaint enquiries were up 22%.

REA chief executive Belinda Moffat says there are many risks with real estate transactions and it’s now more important than ever for property buyers to make well-informed decisions.

“In a competitive market, it’s still essential to do your research before you buy a home. Don’t let your fear of missing out impact your decision-making.”

Property hunters need to take care in the current high-pressure environment and make sure they’ve gathered all the information they need before making a big decision, she says.

“With properties selling so quickly in some parts of the country, we understand that for some buyers it might feel like a race to the finish line, but it’s important to take your time and do it right.

“Doing your homework on a property, researching the transaction process, and getting sound legal advice are all valuable steps that potential buyers can take to make sure they’re setting themselves up for success.”

Buyers should make sure they get a property inspection report, get a council LIM, get their finances in order and get legal advice before they commit, Moffat adds.

However, the process can be a bit different for experienced investors – especially if they are trying to pick up a deal in the current market.

Property investor Kathy Fray says that if a buyer is looking for a bargain right now, it actually pays not to be too cautiously timid.

“The commonest mistake we see with amateur investors is them doing their due diligence before making their offer.

“That's the wrong way around. Get a signed offer on the table and then start to do your due diligence.”

It’s worth noting that once you make a conditional offer, it doesn’t mean you can't then re-negotiate the price, she says.

“What I can say is that if you're an investor looking at a property for the first time at a weekend open home, you're likely moving too slowly to find the real bargains.

“Instead you need to put seven to 10 offers on properties every week knowing it is just a ‘numbers game’ - eventually you'll pick up a bargain.”

But buyers serious about investing do need to be prepared to "hard core" it, Fray says.

“That means investing serious money in mentorship, copious time into property searching, and untold energy into driving the miles and doing the due diligence.”

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