Buying a Property in Australia? Here are 7 Questions You Must Ask
Buying a property in Australia could be a substantial financial outlay. So, before you make an offer on a property, you want to be sure that it is “the one.”
However, with numerous options out there, finding the perfect match for your investment goals might seem daunting.
The real estate market in Australia is gradually embracing the “new normal” amidst the current health crisis.
Off-market property deals are booming, especially for sellers who want to strike the deal before the Christmas-New Year break.
Property prices are rising in Sydney, Melbourne, Adelaide, Canberra, Darwin and Perth.
The CBRE also reports “deep pools of capital looking to invest in Australian commercial real estate.”
As Australia’s residential and commercial real estate sectors continue to recover, finding the most viable option for you would require extensive research.
So, you need to ask questions to ensure you are making an attractive offer to buy a property that meets your long-term goals.
To help you sort fact from fiction, discussed here are the 7 questions you should ask when buying a property.
- What Not to Say to a Real Estate Agent
- Should You Buy Your Property in Your Name, Company Name, or Trust?
- 6 Things to Consider Before You Buy Your First Home
1. Can I have a recent property sales report?
To know the real worth of the property you wish to buy, ask your real estate agent for the recent sales report.
Sales report provides insightful data on recent sales of similar properties around your area and allows you to do a realistic comparison.
This data will give you better bargaining power and ensure the property you are purchasing is priced fairly.
Remember that you consult only with a professional who is having a good grip on the local real estate market in Australia.
2. What are the growth prospects of the investment property?
Whether you are eyeing the home of your dreams or a lucrative investment property, you would want to have the highest ROI and an improved value over time. Therefore, it is crucial to ask about the estimated capital growth prospect of the property.
In major capital cities such as Melbourne and Sydney, investment properties feature long-term growth.
On the other hand, affordable regions like Perth and Adelaide are witnessing gradual progress, with experts predicting a price increase in the first quarter of 2021.
Undeniably, “location” is one of the most vital factors you should consider to realise increased capital gains and better property value in the long term.
3. For how long the property is on sale?
This is an important question to ensure the property is worth the value you are buying it for. On average, a home in Australia remains on sale for around a month. If it is on the market for more than 6 weeks, then you can assume there is something wrong or it is overly priced.
Ask your agent if the property was on auction and still could not sell. If yes, you should dig around to know what the reason was. And if the property cleared the auction, do not fail to ask whether it was a buyer who bid for the pass-in price or the vendor,
says Deborah West – Principal of SydneySlice Buyers Agent.
Simply put, the longer a property is on the market, the less worthy it is. This can be due to pricing or location problems and you wouldn’t want to buy a property that has little value.
4. How old the property is and why the previous owner is selling it?
This is a must-ask question before you buy a property in Australia. Needless to say, the older a property is; the more maintenance it requires.
Repairing or renovating an old property can be expensive. Knowing the right age of the property will help you understand its construction quality.
When it comes to negotiating, knowing why the seller is selling the property can help you make a better deal.
If the owner has purchased a new home, they are likely to relocate soon and as such, would sell off the older property in a rush. This allows you to bargain with an offer that suits you best. Other situations like death or divorce may also give you an upper hand in negotiating.
5. Are there any safety and health hazards that you should be worried about?
Not just the age and structural strength of the property but you should also be aware of whether it is at risk of major hazards such as mildew, radon, lead paint, etc.
These may not only cause health concerns in the long run but also impede your loan approval process when evaluating the property’s valuation report.
6. Can I have a history of the property’s past insurance claims?
To know whether insurance claims have been filed in the last few years, ask your agent to provide a copy of Insurance Reference Services, Australia.
The report will provide a detailed insight into what kind of damages the property has met in the past years.
A property that has history of insurance claims might affect your chances of securing a home insurance for your new purchase.
So be sure to read up on the record of insurance claims as well as to ask the seller specifically for repairs done and insurance filed.
7. How much do I need to pay as closing costs?
The closing cost would include the down payment, loan origination charges and third-party fees for administrative tasks, paperwork processing, etc.
Depending on the region, you may expect to pay on average 2–5% of the property’s total price as a closing cost.
Hence, ensure the agent is upfront in discussing the closing cost with you before buying.
Getting answers to these vital questions will help you know the property better and make an informed decision.
If you’re looking for a home loan, Soho can help you by connecting you with our experienced mortgage brokers.
It’s as easy as clicking here to fill in some basic details and our dedicated brokers will reach out to you through a phone call at your convenience.