Navigating the intricate world of property search and purchase can be overwhelming for both first-time buyers and seasoned investors alike. In this third installment of our insightful series, 30 Tips for First Home Buyers, we delve deeper into practical strategies and tips designed to refine your property search, understand the local market, leverage essential tools, and decode the nuances of price ranges. From distinguishing between your must-haves and nice-to-haves, to getting acquainted with the local market dynamics, and making informed decisions based on comprehensive tools and price insights, this segment aims to arm you with the knowledge and confidence needed to embark on your property journey. Whether you’re defining your property wishlist, exploring the significance of recent sales data, or navigating the often misleading waters of quoted price ranges, these tips are tailored to streamline your search, enhance your market literacy, and optimise your approach to property acquisition. Let’s dive into 30 Tips for First Home Buyers part 3 – Property Search.

Tip 13: Define your property search

Before you waste countless hours running all over the place looking at properties, take the time to define what you are looking for in the home you will buy.

Identify the non-negotiable features that your home must have v those features that you would like to have.

For instance essential requirements might include: the maximum price, the number of bedrooms, the number of bathrooms, the outdoor area required, the suburb or being in the zone or area for a particular school.  Proximity to a park, shopping centre or train station might be nice to have but not essential.

A clear understanding of your essential needs versus flexible wants will streamline your search process and give you a checklist to help you make decisive moves when evaluating potential properties. 

Tip 14: Get to know the local market

A really good test to see if you are on the right path with your property search is to find 3 properties in the area you are looking in, that meet your brief and sold recently in your price range. 

If you can’t find 3 then that’s a strong indication that what you are looking for is not easily achievable (if at all) meaning you will need lots patience and perseverance, or more likely, you need to revisit your criteria. You might need to look in neighbouring suburbs that are a little cheaper or compromise on other “must have” features.

Mortgage brokers and real estate agents also have access to property reports that can give you information on recent sales that might match your criteria including links to the listings so you can take a look at the properties.

Having set your brief and tested that it is achievable then its its time to get out there, inspect properties that potentially fit your brief and both get a feel for the market and to see firsthand what your budget gets you. 

As you inspect properties I recommend tracking what price the agents are quoting and also what price the properties are selling for (even the ones you decide are not for you).  This will help you to evaluate what properties are worth and that is invaluable when it comes to buying one for yourself.

Tip 15: Tools to assist with your property search

In Tip 14, I spoke about property reports which real estate agents, buyers agents and mortgage brokers can access with information about historical sales that can assist you with your property search. Other tools that are useful include:

  • Online websites like domain or realestate.com.au have a growing amount of property data as well as being the easiest way to find properties for sale
  • Property Alerts – Set up property alerts on the real estate websites so you receive notifications when new listings that match your criteria hit the market. This can give you a critical head start in viewing properties and making decisions in a competitive market.
  • Local Real Estate Agents – Talking to local agents can provide you with insights and access to listings before they hit the market. Agents can alert you to upcoming properties that match your criteria and offer valuable advice on the local market. Whether you tell an agent your budget or not they will quickly work it out if you are actively looking at properties (and they are half good at their job). Just remember agents work for the vendor so don’t share your exact numbers with them
  • Buyers Agents – Buyers agents are invaluable in a number of different ways and whether or how you use one will depend on you budget, confidence in your own ability and how much you enjoy the property search process.  Buyers Agents can provide a simple bid at auction/negotiate a purchase service or they can provide a complete property search and purchase service. You can expect that using a Buyers Agent will save you time and speed up the search and purchase process. I would add to the benefits that they increase your chances of buying good properties, paying no more than necessary and have been know to save the clients more than the cost of their fee in the process.

Tip 16: Quoted price range

In Victoria when agents list a property for sale they are required to provide a price range for the property. Many first home buyers expect that the property will sell for somewhere in this range and dream that they will buy it at the bottom of the range. 

It the overwhelming majority of cases properties sell at or above the top of the quoted price range and it is common for properties to go for 10-20% above the top of the range.

Thousands of words have been written about this topic.  Sometimes it is completely understandable and other times it reflects poorly on the selling agents.  I am not going to go into this debate here.  I merely want to help you to navigate the home buying process with maximum knowledge and minimum stress and heart ache. 

When inspecting properties and talking to agents you need to be aware of this pattern and factor it in to your calculations and decisions.

It is also worth noting that the price range quoted will often move (usually up) over the course of a sales campaign as buyers express their interest (potentially making offers) and agents get a feel for the price range at which buyers are prepared to buy the property (and sometimes its just part of the selling agents sales strategy to garner maximum interest in the property).

Understanding that the “quoted range” is not the best reflection as to what a property will sell for will save potential buyers hours of wasted time/effort when searching for a home. Buyers need to develop their own sense of the value of a property value and this is invaluable when deciding if a property is in their price range or not.

This is why getting to know the market (see Tip 14) is so important. Inspecting properties and tracking prices allows a buyer to build their own knowledge and confidence in assessing the value of a prospective home.

 

For more useful tips for first-time buyers, check out part one of our 30 tips For First Home Buyers here, part two here, and our First Home Buyer page in the knowledge centre here.

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