Buying any home is a BIG financial decision. It’s crucial to get the answers to some key questions to help you make the right decision and negotiate the best possible price.
Read on to find out all about the questions you need to ask the real estate agent for a property before you buy, including:
- Why is the seller selling?
- Are there current tenants in the home?
- Is the price negotiable?
- How long has the home been for sale?
- How did you arrive at the listing price?
- Are there any issues with the home, land or neighbouring properties?
- What is the current and future suburb profile?
Why is the seller selling?
Knowing a seller’s motivation for selling can help you negotiate the price and other terms and conditions of buying a home, like the settlement date. The settlement date is when ownership transfers from the seller to the buyer.
Some sellers are more motivated to sell quicker than others. Common reasons for needing to sell quickly include:
- Needing to finance the purchase of another home by a certain date.
- Relationship breakdowns.
- Deceased estates.
- Needing to move to take up a new job opportunity.
How you can use the answer:
If you know that a seller needs to sell quickly, you might be able to negotiate a lower price for a quick settlement date.
Are there current tenants in the home?
This is important if the property is currently a rental property (rather than being owner-occupied) and you want it to be your residential home. Depending on the terms and conditions of the tenant’s rental agreement with the current owner, you may not be able to move in straight away after you buy it.
On the other hand, if you want the home as an investment property and there is an existing lease for tenants, this can allow you to start earning rent as soon as you buy it.
How you can use the answer:
This information can help you decide on a settlement date for your offer if you want to buy a residential home.
If you’re looking to buy an investment property, having good existing tenants on a long-term lease can save you the time, hassle and expense of finding new ones, even if you use a property management service.
Is the price negotiable?
This is a crucial question to ask if you’re looking at homes that are priced slightly above your pre-approved finance limit. Even if you’re looking at homes priced within your limit, it’s good information to know.
How you can use the answer:
If the agent replies that the seller won’t accept an offer below the listing price and it’s outside your limit, you don’t want to waste your time. Look for other properties instead.
If the seller is negotiable, you have the opportunity to buy for a lower price.
How long has the home been for sale?
This will give you an idea if the house is overpriced or if there are any issues with it. Good properties that are priced appropriately tend to sell quickly, especially over the past couple of years during the real estate boom across Australia.
How you can use the answer:
The longer a home has been for sale, the more likely it is that the seller will be more open to accepting a lower offer. It can also be a red flag that there are issues with the property that a building and pest inspection may reveal.
How did you arrive at the listing price?
The agent should be able to justify the listing price by pointing out recent sales of comparable properties in the area for a similar price. You can also research or check this information online yourself.
How you can use the answer:
If the price is comparable to the recent sales of comparable properties in the area, then you know the listing price is reasonable.
If it’s higher, then you have more room to negotiate.
If it’s lower, you may have found yourself a bargain (or there may be issues with the home that a building and a property inspection will reveal).
Are there any issues with the home, land or neighbouring properties?
Asking this question is important because a real estate agent must comply with legal obligations that include:
- not intentionally misleading buyers, and
- not leaving out (or hiding) any important information.
If an agent knows of any issues with the home, land or neighbouring properties, they are legally obliged to tell you. However, proving whether they know about such issues may be difficult, so it’s always best to do your independent research via:
- a local council search of zoning regulations, and
- getting a building and pest inspection done.
How you can use the answer:
If an agent tells you about any potential issues, this should inform your buying decision. You may choose to walk away or use the information to negotiate a lower price.
If the agent says they aren’t aware of any issues, do your own research or get an independent opinion to double-check.
What is the current and future suburb profile?
The agent should be able to tell you the type of people that tend to live in the suburb. For example:
- renters or owners,
- young singles, young families, empty nesters or retirees.
They should also be able to tell you about all of the current and planned future facilities in the area, such as:
- schools,
- shopping centres,
- parks,
- public transport, and
- medical services (like doctors, dentists, etc.)
How you can use the answer:
All of this information can help you to decide whether or not buying a home in the suburb will suit your short, medium and long-term needs.
The bottom line
Asking the right questions before you buy a home will help you to get the information you need to buy the right home for your needs at the right price.