The Process of Buying a Home
Buying a home is one of the biggest investments we will make, and there are many initial questions to ask yourself, such as what you are looking for in a house, asking if you have the finances to buy the property and how you apply for that all-important bank loan.
When buying a house, whether for yourself, your first house, or as an investment property, the experience can be stressful. Staying focused and asking the right questions when considering properties is essential. Research is vital, and this can be done online through various real estate websites from which you'll get a good feel for the market.
But online research is a one-way street. Sometimes you need the human connection and the answers before you buy. It would be best to have an excellent real estate agent skilled in the real estate industry who knows the market well. Don't be afraid to interview real estate agents during your home search because you collect information and gauge the agent's honesty, thereby building trust.
Important Questions to Ask Real Estate Agents
With the agent in front of you and your online research at hand, there are some good real estate questions you should be asking before you buy. It's more than just "Is this house really for me?" Let's look at what some of these hard-hitting questions should be when buying houses.
How long has the property been on the market?
After doing research online, you should have a good idea of the current state of the property market. Depending on whether the market is slow, fast, or steady, you can determine how long a property should be listed before it's sold.
If a property has been on the market for six to eight weeks or more in a steady or good market, it's likely that the asking price is too high and the sellers are still attached to the property. In this situation, it may be best to move on.
However, because the property has been on the market for an extended period, the seller may be open to considering market offers, which gives you the opportunity to make a lower offer.
Are there any underlying issues with the property or area that I should consider?
Most sellers won't blatantly lie about problems, but they may omit certain information to make the sale.
Don't be afraid to ask if there's anything such as an undisclosed problem that could somehow affect your enjoyment of the home. These problems can cost more money, so it's essential to ask this question to understand what lies ahead if you decide to buy the property.
Has the property received any offers?
By researching the level of interest of other potential buyers, you can determine how desirable the property is. This information can provide insight into the seller's willingness to negotiate, even if you don't have access to their specific offers.
While it's unlikely that a good real estate agent will disclose the minimum price required to secure the property, you can ask for recent comparable sales to gain a better understanding of the property's value.
With the seller's permission, reputable agents will provide prospective buyers with a Comparative Market Analysis (CMA) report. This report will equip you with knowledge when making your offer and give you an idea of the price range that the seller may be expecting.
Why is the owner selling?
Knowledge is power. Knowing why the owners want to sell could help you with getting a good price for the home. Here you are looking for specific answers:
"They are moving interstate."
"The kids have left home, and they are downsizing."
As you are purchasing a property from someone, it's essential to know their motives for selling. This information can give you an advantage when making an offer. If the owner's initial motivation for selling has changed or disappeared, your offer may not be as appealing as before.
What you don't want to hear is "They are looking for a change".
Probe deeper and ask the tough questions.
"Are the owners suffering financial hardship?".
Could be one of those questions.
Whatever is going on, you need a definitive answer as to why the owners are selling.
What are the street and neighbourhood like?
Inevitably, you'll be spending a lot of time in the neighbourhood, and it's important to know what you're getting into. It pays to walk around the area and talk to locals or just observe the people walking past.
You can request that your real estate agent provide you with any valuable information they may have about the suburb. This can include recent sales of comparable properties, as well as any houses they are selling in the neighbourhood, along with their listing or sale prices.
Having access to this information can assist potential buyers in ensuring that they are getting a fair deal for their potential property within the current market.
Ask yourself questions such as:
- Is it peaceful?
- Is it a family street with young children, or do older empty nesters occupy the homes?
- How many rentals are on the street?
- Are they young, and do they have lots of parties?
If you are looking for quiet, peaceful living, you will need the answers to these questions.
Any issues with the land?
When buying a property, it's essential to ask your real estate agent questions about the land alone. In Australia, there are several potential environmental hazards, and it's important to determine if the land is prone to flooding, landslides, or bushfires. If the property has experienced any of these hazards in the past or is at risk of them, it could impact your homeowner's insurance and other related areas.
Ask if there are any easements over the property providing access for other parties. If your potential property has been built near railway lines, ask about noise issues.
It pays to do your due diligence when asking these questions as you don't want any nasty surprises should you decide to purchase the property.
Have any renovations been done on the property?
You may not even realise the house you have your eye on has had renovations done. These could be recent or in the past.
Ask the listing agent if any renovations have been done to the house. What you are trying to determine here is the quality of the work and whether it's been certified by the local authority.
Sometimes extensions by DIY renovators don't have approvals, so the work might be unsafe. This could cause issues and extra expenses down the track, so it makes sense to do your research here.
Even when asking the real estate broker these questions, ensure you sight approval for all major work before you buy, and it's always a good idea to get inspections done.
Are there any structural problems?
You have determined whether any renovations have been done on the house, but what about structural problems? These are crucial to be aware of in the buying process, so, as previously mentioned, have the property inspected before you purchase.
Potential buyers would love the buying process to be as stress-free as possible. Knowing if there are any hidden defects or potential issues with the house will prepare you.
Is there room for growth and development?
If you're considering making renovations or additions to a property, it's important to ask your real estate agent about the potential for such modifications. Perhaps the square footage of the existing home doesn't quite meet your needs, but for other reasons, you may still be interested in the property.
By asking how big you can go with renovations or additions, you can assess the property's suitability to meet your needs.
It's worth noting that in some cases, council regulations or local planning schemes may limit the size of the renovations or additions you can make. To avoid any issues, it's recommended that you check with your local council to determine the property's zoning and the restrictions in place.
What's included in the sale?
It's common for homebuyers to have misconceptions about what is included in the sale of a real estate property. While the land, dwelling, and attached items are typically included, items such as light fittings, dishwashers, and laundry appliances may or may not be part of the sale.
To avoid any confusion, it's important to get in writing from your real estate agent exactly what is included in the sale. It's common for sellers to take free-standing items like dishwashers with them, even if they are built in.
Items like floor coverings, window treatments, and built-in furniture may be expected to be included, but you need to make this clear. Find out if these are included with the purchase or if they will remain with the seller upon settlement.
As a safety net, photograph the items and get them signed off on. This can prevent a situation where, for example, a 65" Sony LED screen is replaced with a smaller, cheaper TV before settlement. That's where photos come in handy as a descriptive list.
What are the council and water rates?
Good agents know this and can easily provide this to you in any format. Most agents will have an information package or brochure at the open home with information on the council rates included.
It is always good to know what you will be expected to pay for council and water rates before committing to a purchase of a house.
Are there any developmental plans for the area?
It pays to check with the real estate agent if there are any plans to develop in the property's area. These plans will be available through the local council, and a good agent will be able to access these for you.
If you are buying a house near a major town or city, there may be plans for transport infrastructure such as major road developments, or a train station to be built nearby. There could be plans for new housing developments or shopping centres close by which could affect your property values.
These could influence your property's value, so it is important to research before buying.
Some councils may even be working on infrastructure projects, so it pays to ask real estate agents these questions.
What is the potential rental yield?
Buyers investing in property to use as an investment are likely to also want to know what the potential rental yield is. It's important to check with your real estate agent as well as look at the information available online, such as median house prices and median rents in the area, before deciding. This will give you an estimate of how much money you could expect in rent for the property.
This is a key factor to consider and research before you buy, as it will also influence your mortgage repayments. You'll need to make sure that your rental income covers or exceeds your mortgage repayments. A good agent can provide you with all the necessary information.
Finding a Good Real Estate Agent
If you're a potential homebuyer, it can be challenging to identify the top real estate agents who can assist you with your questions and concerns. However, if you have a potential agent in mind, you can ask a few questions during your initial meeting to determine if they're the right fit.
Inquiring about the selling process, the real estate market, the buyer's market, and other important questions can help you assess their knowledge and experience.
There are many agents in the market, but the best ones will have no problem answering tough questions and providing you with the information you need. By selecting the right agent, you can improve your chances of finding your dream property and making a successful purchase.
How Can a Real Estate Agent Help Me in Buying a Home?
The right real estate agent is invaluable and can provide an array of important services to help you in real estate transactions. From finding the right property to negotiating the best price, they will be your advocate throughout the entire process. They are experienced professionals who know how to get the best deal for you.
They can also assist in answering all the questions listed above, such as council and water rates, any development plans for the area, what is included in the sale and more. By working with an experienced real estate agent, you are putting yourself in a better position to make informed decisions when buying a home.
Ultimately finding the right property is up to you, but having a good real estate agent can help you make the right decision for your home. Research and ask questions, but most importantly trust your real estate agent to provide the best advice possible to give you the peace of mind that comes with making a confident and informed purchase.
Due Diligence
These are just some of the tough real estate questions you should ask when buying property. Doing your due diligence and asking the right questions is a crucial part of making sure that you make an informed decision about buying a home. Make sure to do thorough research and use professional assistance to ensure that you make the best investment possible for yourself.
It's important to obtain all necessary information when buying a property, including tips and guides to buying property or questions about buying an investment property, as well as the tough questions listed here.
While online research can be helpful, asking questions face-to-face with the seller's representative, such as the real estate agent, can provide more reliable information.
Face-to-face questions allow you to feel the information and whether the other party is being truthful.
It's crucial to ask tough and occasionally personal questions, even if it may make you feel uncomfortable. Obtaining all necessary information is crucial before making an offer on the property. By asking the tough questions, you increase your chances of making a smart investment that appreciates over time.