Top 4 tips for buying with your head
How do you ensure you’re buying a property with your head and not your heart?
What do I want?
Start with a checklist. “Before leaving the lounge room, I would write down exactly what I am looking for, and put a checklist together,” says Josh Masters, Buyers Agent at Your Empire
It’s important to include why you are buying (investment versus home), as well as what you need from the property.
“If you are investing, what sort of rent do you need to cash flow the investment? How does the area look in terms of capital growth? What is your budget? To work out your budget, you can use our home loan calculator.
“If you are buying somewhere to live, how much land do you want? How many bedrooms? Do you need parking? What style of property do you like?”
Consider the three Ps - price, position and property.
Have I done sufficient research and due diligence?
Looking at five or even 10 properties in a six-month period does not constitute adequate research, Masters says.
When you do find something you like, do your due diligence.
“Get a building inspector in, or get a strata report done if you’re looking at an apartment, and get an independent valuation done – these things are priceless in terms of understanding whether you are getting what you are paying for” says Masters.
Am I just following the herd?
Given the current property climate, many buyers are experiencing fear of missing out.
A recent survey uncovered that 58% of home buyer rushed the purchase process, not completing due diligence prior to price negotiations.
So it’s important that you take the appropriate steps, including market research and due diligence, setting yourself a clear budget, and getting your finances in order by getting conditional pre-approval on your home loan.
Who can help me at auction?
Before attending an auction, we recommend establishing a firm price limit. If you don’t feel you will be able to stick to it in the heat of the moment, you can ask a trusted friend or enlist a buyers agent.
“A buyers’ agent will cost about $1000 to bid at auction and if that’s not the best money you have ever spent then I don’t know what is – they have negotiation tactics and will stop when they reach the limit you have given them.”
Things to know before you Can: The advice contained in this article is for general information purposes only and may contain general advice. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances. Commonwealth Bank of Australia ABN 48 123 123 124.
 The CommBank Research was conducted by Lonergan Research, among 1,098 Australian aged 18 and over who have bought a property in the last five years or are looking to buy within the next two years. Fieldwork commenced on Friday, August 16 and was completed on Monday, August 19, 2013. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.