Inspections

[mwac]

I'll be looking at houses and potentially making offers soon.

What are the important questions that I should be asking the real estate agents when I'm inspecting the house? I'm starting to look at properties, but don't want to miss out on vital questions that should be asked.

Also, should I be making any offers before I inspect the house or is it preferable to inspect the house before I submit any offers?

I was thinking to make an offer with a sunset clause on a house that I like, even thought I haven't personally inspected it yet.

Thank You
-John from Albury (NSW)

 

[mumbai]

I'll be looking at houses and potentially making offers soon.

All the best!

What are the important questions that I should be asking the real estate agents when I'm inspecting the house? I'm starting to look at properties, but don't want to miss out on vital questions that should be asked.

None. Don't waste time asking questions as more often than not they will hide the truth

Also, should I be making any offers before I inspect the house or is it preferable to inspect the house before I submit any offers?

Latter

I was thinking to make an offer with a sunset clause on a house that I like, even thought I haven't personally inspected it yet.

If you cannot personally inspect, get someone you trust to inspect it for you. Also, get the pest and building inspection done (this can be done before or after the offer though).

 

[The Y-man]

Offer after. Why offer on something that might be a dud????

Questions we ask (they are pretty standard, and a decent agent will have scripted answers ready, but occasionally they will say something that might benefit you):

1. How much does the vendor want? (I don't care what it says on the advert...)

2. How much will the vendor accept?

3. How long has it been on the market? (In victoria you go an dthen compare this claim with the S32 prep date)

4. Does that BMW come with the property? Oh sorry, it's yours is it? Nice car!

5. Gee that <name any fault, crack, rust spot, dripping tap> looks bad...... (if they say it will be repaired, call the bluff unless it is written in the contract - what you see at the time of inspection is what you get) - How much was it again that the vendor will accept?

6. How much rent will this get? (even if PPOR, just say it's for investment - gives you more negotiating range). A good answer to this is either an honest one (market going rate) OR they say "I'll need to get our PM dept to estimate for us"

7. Why are they selling? (Bought something else at auction last week and need to settle in 20 days is one you'd like to hear!)

8. Settlement period?

The Y-man

 

[superAndrew]

6. How much rent will this get? (even if PPOR, just say it's for investment - gives you more negotiating range). A good answer to this is either an honest one (market going rate) OR they say "I'll need to get our PM dept to estimate for us"

This one is quite important. Always say it's for investment.

Try to point out a lot of faults during the inspection.

Never show that you love the house obviously but also don't don't exaggerate with the faults.

Be respectful in the process and try to make the agent like you.

Andrew

 

[mwac]

6. How much rent will this get? (even if PPOR, just say it's for investment - gives you more negotiating range). A good answer to this is either an honest one (market going rate) OR they say "I'll need to get our PM dept to estimate for us"

Thanks for the tips.

Why do I get more negotiating range if I say it's for investment?

 

[The Y-man]

Thanks for the tips.

Why do I get more negotiating range if I say it's for investment?

Because when they say "about $x per week...." you look sad and say "Well, I'll have to think about it.... you know my loan will be at z% = $Y per week, and while the CG in the area might be ok, I still have this holding cost..... etc.... "

You then add supplementary questions: "...so what are the rates? Outgoing? Any overlays (Heritage, Bushfire etc)?"

The Y-man

 

[rizzle]

This thread has been very useful, definitely re-thinking my approach to inspections (for PPOR). Thanks.

 

[wylie]

Thanks for the tips.

Why do I get more negotiating range if I say it's for investment?

Also if the agent and vendor know you are looking for your own PPOR they know you might be emotionally engaged with this particular house and pay more.

 

[chunho01]

I'm trying to get my first one as IP too, and finding agents very sneaky and can be hard to deal with (oh that fake smile).

My case: the property was passed in at auction, not many showed up. Initially advertised for $410k - $440k. Agent later then insisted that if I offer anything less than $440k, I would be wasting time. Going unconditional doesn't help.

Is it unreasonable to offer at advertised auction price? Since it was passed in anyway. So how should I approach this? I am thinking of waiting about 5 more days to make them nervous, then come in at $450k. I think market price is around $460k - $470k max.

 

[D.T.]

I'm trying to get my first one as IP too, and finding agents very sneaky and can be hard to deal with (oh that fake smile).

My case: the property was passed in at auction, not many showed up. Initially advertised for $410k - $440k. Agent later then insisted that if I offer anything less than $440k, I would be wasting time. Going unconditional doesn't help.

Is it unreasonable to offer at advertised auction price? Since it was passed in anyway. So how should I approach this? I am thinking of waiting about 5 more days to make them nervous, then come in at $450k. I think market price is around $460k - $470k max.

Move onto the next one then.

 

[chunho01]

Move onto the next one then.

I kind of want it.. Because I know it would be a bargain even at $450k. The comparable analysis is indicating a $460k - $470k market price.

 

[Big Will]

Usually with auctions they range they give will be below what the vendor will take as they want to get multiple people interested. If you think 450k is reasonable go ahead and offer it. Got a friend who has just put an offer of 570,000 on a 520,000 + property and it wasn't accepted... Go figure....

 

[Scott_Snap]

While I agree with everything above ...If your going to get a paid building and pest inspection, organise this before you make the offer. A building and pest inspection should alert you to potential areas that may need further investigation or are currently defective. The wording in a standard sale contract limits the exit clause to "Major structural defect " Just because its not structural doesn't mean its not a deal breaker. Don't take away the effectiveness of a pre-purchase inspection by making the offer first. Beware the tick and flick inspector on site for 40 minutes and walks through the house once.

 

[MightyWill]

Most agents won't take your offer serious if you have not inspected it. They will insist that you inspect. How do you not know that there isn't a big hole in the lounge room wall with giant termites crawling all over the place.

 

[tj22]

are you in victoria? and if so can you make a written offer (via email) with out having it on the s32? and would they take this serious.

Offer after. Why offer on something that might be a dud????

Questions we ask (they are pretty standard, and a decent agent will have scripted answers ready, but occasionally they will say something that might benefit you):

1. How much does the vendor want? (I don't care what it says on the advert...)

2. How much will the vendor accept?

3. How long has it been on the market? (In victoria you go an dthen compare this claim with the S32 prep date)

4. Does that BMW come with the property? Oh sorry, it's yours is it? Nice car!

5. Gee that <name any fault, crack, rust spot, dripping tap> looks bad...... (if they say it will be repaired, call the bluff unless it is written in the contract - what you see at the time of inspection is what you get) - How much was it again that the vendor will accept?

6. How much rent will this get? (even if PPOR, just say it's for investment - gives you more negotiating range). A good answer to this is either an honest one (market going rate) OR they say "I'll need to get our PM dept to estimate for us"

7. Why are they selling? (Bought something else at auction last week and need to settle in 20 days is one you'd like to hear!)

8. Settlement period?

The Y-man

 

[Big Will]

are you in victoria? and if so can you make a written offer (via email) with out having it on the s32? and would they take this serious.

I used to work as a REA and to answer your question simply no.

As an agent the only offer I would present was one contained within the contract of sale with the section 32. This way once it was agreed there is no need to do a up a contract of sale and get people to sign what they have agreed.

How would you feel if you had been given verbal agreement that the vendor would accept your offer then you go in and sign the contract of sale and when the agent goes to the vendor they say we have been thinking and looking at other properties and we think $500,000 is to little and want $530,000? or reverse from the vendors side.

Wait for the S32 and make sure your offer is on the CoS that way once it is agreed upon (with signatures) it is binding.