9 Buyers traps andhow to avoid them

WelcomeStarr Partners Liverpool was first established in 1990. The previous owner commenced the business with himself and a receptionist. After over 15 years, of hard work and continual success, in 2005 he decided to part with the business.

In November 2005, Simon Perri, a local resident of Liverpool’s outer suburb Rossmore, and Michael O’Sullivan the current real estate director of Campbelltown Starr Partners, decided to join together in the purchase of Starr Partners Liverpool.

Between the two, they have in excess of 35 years real estate experience. Both partners decided to rebirth Starr Partners Liverpool. In doing so, they committed to some basic principals. They are, to provide the highest possible customer service to their clients, and achieve the best possible outcome for all. We believe Starr Partners Liverpool has now achieved that.

Today, we are a major force within the Liverpool area. We have seen great success for all of our clients, and regardless of the market conditions, have been able to achieve record sale prices. Over time Starr Partners has been able to amalgamate a further four offices together with their current office.

In early 2008, Starr Partners Liverpool’s success was recognised by the public, with less than 2 year of operation, Starr Partners was the recipient of the Small Business Award based on the performance and professionalism voted by their clients. The director Simon Perri goes forward to say “standing on the basic principals of providing high quality service and ensuring the best results for our clients, we will continue to do our utmost regardless, our main priority is that we ensure that our clients always come first”.

Starr Partners Liverpool stands for the highest quality service, with honour, respect and honesty in our daily dealings with all of our clients, associates, work colleges and members of the public.

This booklet is designed to assist you by offering advice and our professional service when purchasing or selling your property.

Starr Partners Liverpool endeavours to be recognised by the community which we serve as being caring, well respected and an efficient real estate agent within the Liverpool area.

We would be happy to assist you with your enquiries. Please phone our office on 9822 5999.

Simon PerriDirector & Licensee In Charge

Do you remember buying your first home ?

For most of us our first home buying experience is often an anxious and daunting time.

It can be the first time we deal with a solicitor ; the first time we apply for a mortgage ; the first time we deal with a real estate agent as a buyer ; the first time we make an offer to buy something involving so much money.

No wonder the process of buying or selling a property is rated the 3rd most stressful event of our lives (behind the death of a family member and the diagnosis of a life-threatening illness).

And because most of us buy or sell a property less than 4 times in our entire life the process doesn’t get any easier each time we embark on a property transaction. The mere fact that many years elapse between transactions ensures that, if nothing else, the law involving the sale or purchase of property has changed and therefore the process has probably changed in some way (only adding to the stress).

Like anything in life the more often we do

something the quicker we become proficient. The problem with buying or selling a property is that, for most of us, we simply don’t get enough practise to become proficient.

Such lack of “practise” often causes buyers to make fundamental errors. These errors often result in a substantial loss for the average buyer including . . .

• Paying too much for the home they want

• Losing their dream home to another buyer

• Buying the wrong home for their needs

• Getting stuck with a property that needs lots of repairs

A systematic approach to the home buying process can help you steer clear of these common traps, allowing you not only to cut costs, but also to secure the home that best suits you.

Here’s the 9 most common mistakes made by the average property buyer and how to avoid them.

9 Buyer traps & how to avoid them

1.Banking has changed a great deal over the past 10 years. These days few people make an appointment with the Bank Manager in order to apply for a home loan.

Today Mortgage Origination companies arrange home loans for many property buyers. These companies deal with up to 2 dozen banks and lending institutions including the “big 4”. Their representatives will come to your home, listen to your requirements and then match your circumstances to the best loan product from their range of banks. Best of all their service is FREE – they are paid a small fee for arranging all the paperwork by the bank you place your home loan with.

With in-home services such as those offered by Mortgage Origination Companies it has become very easy for any homebuyer to arrange a pre-approved mortgage.

A pre-approved mortgage is one where your bank has agreed to extend to you a mortgage up to a maximum amount (determined by the bank and based on your financial circumstances) before you have located the right property to purchase.

Naturally, once you’ve found the right property the advantage of having arranged a pre-approved mortgage becomes obvious.

You will be able to bid confidently on the property knowing that your bank will support you (subject to your maximum amount and sometimes subject to a property valuation). Any offers you make to buy a property will have more substance to them when the owner knows you have a pre-approved mortgage. You will quickly leapfrog other interested buyers who have not arranged their finance. And you can confidently commit to a purchase knowing your finances are all in place.

Failing To Obtain Mortgage Pre-approval

If you would like to speak with a representative of a mortgage origination company call Craig Corbett of Choice Home Loans on 4647 5999 – Craig will come to you 7 days a week at a time that suits you. Craig can arrange your mortgage from your choice of 23 Australian banks and lending institutions

2. Failing To Take Hidden Costs Into AccountBuying a property involves a number of costs, some are obvious costs such as the purchase price of the property and others are hidden costs and only appear at the last minute.

It is essential that buyers understand these costs and allow for these “extras” in their bud-geting.

Here’s a quick list of some hidden costs . . .

• Bank Fees• Building Inspection fees• Council Rates / Water Rates• Mortgage Application Fees• Mortgage Insurance• Mortgagees search fees / settlement fees /

bank cheque fees

• The cost of a professional pest inspection• Solicitors / conveyancers “extra” costs such

as photocopying, stamps, phone calls etc• Removalist costs / truck or ute hire• Stamp Duty on the mortgage• Strata search fees• Survey costs• GST on everything• Building insurance / contents insurance for

the new property• Rubbish removal / cleaning costs• Buying new furniture for the new house

And there are probably others. Whatever you do be sure to allow for these “extras” when you first budget to buy a property.

3.Buying The Wrong Property

What are you looking for in a home?

A simple enough question, but the answer can be quite complex. More than one buyer has been swept up in the emotion and excitement of the buying process only to find

themselves the owner of a home that is either too big or too small. Or a home that’s further from work than they expected, or a home that has more repairs than they expected.

Either way it makes sense to take the time to work out your needs well before you begin the search for a property.

Write a list for yourself and then use this list as a yardstick to measure each property you visit.

If you do you’ll find the whole process will be much easier and you’ll be genuinely happy with the home you eventually buy.

4.Most of us use the same strategy when we go shopping. We compare one product with another until we determine which product will fulfil our needs – we call this comparison shopping.

When we begin the search for a home we use the same process. This requires that we look at several properties before we make our choice.

The mistake that many people make is that they buy the first home they inspect without comparing several homes.

Buying the first home you see invariably results in a poor choice.

Take the time to inspect several homes before settling on one you like. Even if you see a number of properties you may end up going back to the first home you saw – that’s OK, so long as you see several homes as a comparison.

On average most buyers see 5 to 12 homes

before making a decision on the purchase of a property.

Failing To Inspect Sufficient Properties Before Making A Decision

5.What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal?

If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind.

Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on a property that represents excellent value.

Take the time to read the local paper in the area where you intend to buy. Check out the property pages to see what other homes are selling for. Read the property magazines to gain similar market awareness and visit a number of local real estate agents to inspect

their display window.

All this information adds to your market information so that when you make an offer to buy a property you can feel confident that your offer is based on fact.

Bidding Blind

6. Failing To Commit The Owner To The SaleSo, you’ve found the home of your dreams. You’ve submitted an offer to the owners and they have accepted – you’re over the moon.

However, care must still be taken.

Once you have come to an agreement with the owner on the sale price and the terms of the sale it is imperative that you secure the proper-ty immediately. After all, the last thing you want is for the owner to change their mind about sell-ing to you.

In NSW you can do this by agreeing to a condi-tional exchange of contracts immediately. The agent can usually arrange everything within a very short time.

A conditional exchange of contracts allows a buyer 5 business days within which they can change their mind about purchasing. On the other hand this process locks the owners in – they cannot change their mind about selling to you nor can they change their mind about the price or the terms of the sale.

Exchanging contracts is a legally binding transaction that may involve a buyer losing 0.25% of the agreed purchase price should they decide not to proceed with a purchase. How much is 0.25% of an agreed purchase price ? On a purchase of $300,000 the pos-sible loss in a penalty payment of 0.25% is $750.00

Failing To Obtain A Good Building / Pest Report

7.If you were considering the purchase of a motor vehicle and your knowledge of motor vehicles was limited you would probably undertake an NRMA inspection of a car

before you committed to a purchase.

After all the cost of such an inspection is very small compared to the cost of the car.

9.Failing To Carry Out A Final Inspection

It makes good sense to insure your interests by having a professional inspect before you buy.

In the same way it makes good sense to have a professional building inspector and a professional pest inspector check out a property before you buy.

The cost is generally very small compared with the cost of buying the wrong home.

Your solicitor or conveyancer will be able to arrange these inspections for you. Whatever

you do be certain to have both these inspections - even for new homes.

8.Moving day can be very exiting – and very tiring.

The one thing that creates the biggest headache on moving day is the key (or keys) to the new home.

The agent will generally only have what is referred to as “access keys” – enough keys to get through the front door.

Unless the agent has specifically gone out of their way to chase up the owners for all their keys there may be a problem on moving day.

It pays to enquire from your agent at least a week before settlement about the location of all the keys for the property you are buying. In this way the agent will be on notice to have all keys available for you on the day of settlement.

Failing To Check On The Availability Of Keys

Whatever you do be sure to have a final inspection of the property you are buying.

A final inspection usually takes place on the day prior to settlement. The object is to ensure that the property is in the same condition as when exchange of contracts took place. If the property is damaged or in a substantially different state to what it was when you purchased the property you

should alert your solicitor or conveyancer immediately.

Although it is a rare occurrence for a property to be damaged in the weeks between exchange of contracts and settlement it is very important that each buyer inspect the property prior to final settlement.

Remember, once settlement takes place there is no recourse on the old owner.

Contact Details 3/52-58 Memorial Ave Liverpool NSW 2170

Phone: (02) 9822 5999 Fax: (02) 9824 0582

Or by email info@starrpartnersliverpool.com.au

Visit our website www.starrpartnersliverpool.com.au

This Special Report was provided to you free of charge by Starr Partners Liverpool.If you would like to take the next step on your path towards buying a property simply call our offi ce, 7 days a week, on 9822 5999 and speak with a member of our sales team – they will be happy to answer all your questions.If you would like some further information regarding buying, selling or renting property, we produce a range of Special Reports on different subjects – simply call us on 9822 5999 to arrange to have a full list of available reports posted to you.If you liked what you read in this report we would very much appreciate it if you would mention our name to your friends, relatives, neighbours and co-workers – you can be certain we’ll look after them, their property and their future.

PLEASE NOTE : Recipients of this report are reminded that, although due care has been taken in the preparation of the within contained material, prospective property buyers and sellers are always best served by making their own independent inquiries before the sale or purchase of a property.

© M. O’Sullivan 2001