My first home….
Over the past few weeks I have managed to secure a property in Melbourne. To buy a home was always the plan this year, however I never imagined it to be as difficult as it was. Having never been exposed to the property market, I found it a steep learning curve, however there are some tips I can instill to you if you are thinking about making the biggest purchase of your life.

The open inspection
You really need to plan your open inspections and contact the real estate agent prior to the inspection to ask some basic questions. Due to the government grants, there are plenty of people out there looking to buy their first home so competition is tough. However don’t let that get to your head, as it did for me at times.

Pay little attention to the property description, except for the plain facts. The descriptions posted on estate agent’s websites are fanciful, however they have factual information which you is your evidence for what to expect in the property. False advertising is a problem, so pay close attention to the facts but discard the fanciful statements.

For example: during our inspection of a property we noted that it was advertised as having a dishwasher, but it did not have one. We pointed it out to the estate agent, who made it look like it was a simple error. Watch out!

Money Manager is a good website which has inspection tips for home buyers, including a guide about what to look for in each property (for example: proximity to schools, public transport, shopping centres etc). Ensure you inspect the property during different times of the day: morning, afternoon and night time. For example: we inspected a house on a Saturday. The house’s proximity to the freeway was a selling point, however we noted one morning that the entrance to the freeway has heavy traffic on a weekday morning, completely blocking the driveway to the house, making entrance and exit to the property extremely difficult.

The Section 32
Every property must have a section 32 available. The latest trend is to have the property available for inspection while the Section 32 is still pending. This is really annoying, because often you may waste your time inspecting a property and then find something in the Section 32 which is totally not what you were expecting. A classic example is when I inspected a property in Eastern suburbs of Melbourne. The property was brilliant, absolutely stunning and about 1 week later I received the Section 32 by email. After close inspection, I noted that the property was built on a subdivision of a larger land and that there was a SHARED water meter. The water bills will be split in half no matter what each household spent. The buyer had to spend money (pending approval from the other home owner) to install a new water meter and connect it to its own water supply. To me that spelt out possible major problems, so I promptly withdrew my interest for that property.

You must ask the estate agent some basic questions
The estate agent is representing the vendor, make no doubt about it. They will say whatever they want, whenever they want, and choose to deal with whichever buyer they want. Note also the price range the property is advertised for. The trend these days is to quote a price range, or “use the + sign” (foe example: 400K+). Add 10% to the property price, because this is the realistic value. I found it really frustrating to inspect properties advertised at a price which I could afford, but then find out it was underquoted to attract the audience.

The estate agent will take down your names and number, and then present it to the vendor to explain the “massive interest we have received in the property”.

The basic questions you must ask are: 1) Have you got any offers on board, and is it in writing, 2) What are the overheads: council rates, water rates, owner’s corporation rates (if the agent does not know this, then pay close attention to what they say), 3) Can you show me the offers (they cannot do so officially, but some agents break the rules) 4) What is the settlement terms, and deposit terms (make sure you set the terms).

Never ever make an offer straight away for the property, and sound very interested in the property. This can be achieved via the phone. You will find that other home buyers will make statements like: “I want to make an offer”, “I am really interested”. Now you don’t know if they are genuine buyers or just the next door neighbour who is playing a helping hand. Pay close attention to other home buyers who are apparently inspecting as sometimes you might catch them walk along the street into their homes, therefore playing a helping hand to the vendors to make up the numbers.

I think I have said enough for today, in my next post I will talk about my personal experience with estate agents by providing examples.