Buying property requires a strategic approach

Buying a home or investment property is likely to be your biggest financial decision, yet so many people are blinded by emotion when making a purchasing decision, usually resulting in paying too much, or worse, buying the wrong property. Let me explain!

In my daily work, we get approached by buyers frustrated from continually missing out on their desired property, as well as buyers not knowing how much they should pay for a particular property. There are also buyers not sure if the property of choice is the right one for them - whether that's a place to call home or an investment property to help secure their financial future.

Below are the top 5 common issues I see amongst buyers, along with my thoughts on what you can do to help increase your chance of success with your next property purchase.

Top 5 issues and what you can do about it:

1. Financial constraints

Many buyers struggle to find a property that fits within their budget. This is the most common issue that we see as usually emotions take over.

Being realistic is the best strategy here to ensure you purchase a property within your affordability and within your borrowing capacity.

When working out your absolute maximum walk-away price, ensure you stress test the loan amount you plan to borrow by adding at least 2% on top of the interest rate quoted by your mortgage broker - this way you're allowing a buffer for possible rate rises over the term of your home loan.

2. The property sells way above the quoted price range

The true value of a property is the price point where the buyer meets the seller - anything else is merely an opinion on price, which is also the case with the selling agent quoting range.

The best strategy here is for you to work out what the property is worth based on comparable properties that have sold and settled over the last three to six months. Also work out what the property is worth to you - of course this number is unique only to you based on your lifestyle and budget preferences.

When working out your absolute (best) walk away price, ask yourself... would I have paid another $500 to secure this property? If the answer is a resounding NO, then you know you've reached your limit with certainty!

3. The selling agent is creating hype saying there is strong demand for the property

Real estate agents work for vendors and will be tenacious - and at times ruthless - in their quest to secure them the highest price. Take what they say with a grain of salt and do your own research - it's the only way!

Go to the open for inspection and say very little. It's important that you have your "poker face" on and show little emotion - even if you love the property. This also applies if it's an investment property knowing that it ticks all the right boxes.

Definitely let the agent know that you're interested, and be sure to register your interest, however you should advise the agent that you're also considering other options and to please keep you posted.

If asked to make an offer prior to auction, you're best to sit back and wait for auction day as transparency at an auction is usually best - this ensures you don't get fooled into buying a property with phantom competition.

Being transparent with the selling agent about your interest is a good idea to ensure that the property is not sold from under your nose, and if it is going to sell prior to auction, that you get the chance to throw your hat in the ring.

4. Market conditions

Low stock is a very common issue for buyers - like right now - where stock levels for quality family homes are very low as buyer demand is outweighing supply. At least this is the case in Melbourne and surrounds.

The best strategy here is to build a relationship with prominent agents in your desired location and that you keep in regular contact with these prominent agents to ensure they tip you into opportunities as they arise, as well as possibly provide you access to the hidden market (i.e. off-market properties).

5. Negotiation and Competition

Buying a home or investment property is likely to be your biggest financial commitment and as such emotions run high.

Unless you work in property, there's likely to going to be a significant knowledge gap.

Choosing the right property is one thing. Knowing what the property is worth and beating your competition is another!

Due diligence is mission critical here to ensure that the property of choice doesn't end up costing you a bomb down the track with significant repairs. It's also important you do your due diligence to ensure you pay what the property is worth - or what the property is worth to you at most!

We see this all the time where competition drives buyers hard, particularly at auctions where emotions run high and the pace is fast, with keen buyers playing against sophisticated tactics to drive up the price.

If you plan to bid at auction, be sure to attend to as many auctions as you can to familiarise yourself with the process and what is likely to happen when it's your turn.

In summary...

As you can see, buying a property is more than just a few clicks on realestate.com, turning up to an open house, and signing an offer. Buying property requires a strategic approach to ensure that you not only buy the right property, but to also but it at the right price.

If you want to buy your next property lead by strategy and with ultimate success, please get in touch with us today for a no obligation discovery call to find out why we're your secret weapon when it comes to your next property move.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Properties for sale aren't all created equal

In my line of work, I often come across buyers who spend considerable time trying to find their dream home, or astute investment property. The look of exhaustion is usually the most obvious when asked "how long have you been searching for?". This group of buyers usually don't realise that their competition is a lot bigger than what meets the eye! Let me explain...

Buying property is becoming more and more complex and demanding, especially in the current times where stock levels are at their lowest in a very long time! More and more property buyers are reaching out for professional help, as evident in the rise of demand for services afforded by buyer's advocates.

You see, not all properties are available for sale equally. There are three ways a property sale is transacted, and in most cases, buyer's advocates are the main ones with access to all three channels.

Here are the three ways properties are available for sale and transacted:

1. Off-Market Properties: An off-market property refers to a property that is not publicly advertised or listed on the open market. These properties are typically not actively marketed and are not widely known to potential buyers. Off-market properties are often sold privately through specialised real estate networks that connect buyers and sellers confidentially. Off-market properties may be sought after by investors or individuals looking for exclusive opportunities or unique properties that are not readily available to the general public.

2. Pre-market Properties: These properties are usually being prepared for the market and are not yet officially listed. In this context, a pre-listed property would be in the stage before it becomes an on-market property. It might involve activities such as preparing the property for sale, staging, photography, and gathering necessary documentation. There are many occasions where pre-market properties don't end up going to market and are sold privately. This mostly happens between a buyer's agent and a selling agent where the property matches the buyer's brief and there is consensus around price.

3. On-market Properties: These properties are officially listed for sale through established channels such as real estate agents, and online listing platforms. These properties are actively promoted and made accessible to potential buyers. When a property is listed, it is marketed to a wider audience, allowing interested parties to view the property's details, price, location, and other relevant information. Listed properties are typically subject to standard sales processes, including negotiations, inspections, and legal procedures.

Right now, there are postcodes around Melbourne (and surrounds) where off-market properties makeup as much as 30% of properties available for sale. This is particularly the case for the more affluent areas such as Bayside and surrounds, where more sellers prefer to be private when selling their homes.

Like anything, there is no "one-size-fits-all" when it comes to buying property. The right advice, and the right guidance, can make a significant difference to not only securing your dream home, but to also buying a property that accelerates your wealth in a more predicable way over the years.

I hope that my blog today helps you in some way. If we can help you buy your next property led by strategy and success, please contact us and find out why we're your secret weapon when it comes to your next property move.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

7 key tips for property development success

Property development, also known as real estate development, is the process where buildings and/or land is developed with the key objective of raising its value.

For some, property development is a strategy used for manufacturing property to help build a portfolio, whereas for others it's a business of building and selling real estate - for profit.

There is no right or wrong as everyone's beliefs, and circumstances, differ. For me, I'm a big believer that wealth is a measure of your holdings! So, for this reason, I decided to step up my property journey by developing townhouse sites as a way of accumulating more property to add to my growing portfolio.

Over the past decade, I have successfully developed multiple sites into residential townhouse developments, mostly in blue-chip inner-city locations where I could foresee growth.

As the saying goes, success leaves clues, so today I wanted to share with you my seven key tips for development success.

My 7 key tips for development success...

  1. Expect the unexpected:
    Be sure to have a sound financial buffer BEFORE you start as there will be issues outside your control. For example...
    • COVID19 happened - a black swan like no other!
    • Interest rate rises have been coming hard and fast since May 2022
    • Troublesome neighbours can hold you up, adding cost to your project especially if you land at the tribunal
    • Permit approval hold ups - driven by unnecessary red tape - will add to the overall project cost
  2. Time is your most valuable resource:
    Each day costs you money - from holding costs to opportunity cost. Here are my suggestions...
    • Always be proactive and stay on top of your team and stakeholders
    • Be extremely diligent, "...I'll get back to you" doesn't cut it - you must be on top of everything and on top of everyone!
  3. Be decisive:
    Make timely decisions and don't over analyse everything - your gut is usually the best compass. Here's what I mean...
    • Make smart timely decisions
    • Sometimes you just have to drop the ego and consider the bigger picture, even if this means paying your neighbour "go away money"
  4. Engage your dream team:
    If nothing else, you must get this bit right. The success of your project will all come down to the quality of your team and the experience they bring. Going cheap will cost you. Here are my tips...
    • Hire slow, fire fast
    • Don't compromise on quality - as the right consultants are worth their weight in gold
    • Include consultants that walk the talk, with a development success record to demonstrate
    • Pay your team on time - or before time if you can - as this goes a very long way!
    • As Warren Buffet once said "price is what you pay, value is what you get" - enough said
  5. Don't commit until your funding is confirmed:
    You wouldn't go on a road trip without knowing how long your fuel will last, and/or where the next refill station is located, would you? Here's what I recommend...
    • Allow a healthy margin for the unknown
    • A cash buffer between 7% and 10% is recommended
    • Study the conditions of your pre-approval and be sure you understand the draw-down process
    • If you're funding the project in other ways, know how to access the funds and timing thereof
  6. Get out of the ground, fast:
    Your biggest (unknown) risk is underground. Your due diligence here is of utmost importance. Common issues which can come up include...
    • Rock is very costly to have blasted and removed, even if the site was tested prior to digging
    • Delays with hoarding permits, demolishing permits, and other permits, can hold you up - adding cost to your overall project
    • Traffic management issues may pop up if not planned thoroughly in advance
    • Tradesmen are quick to jump onto the next job if you're not organised, which will delay you
  7. Engage experience to secure the right site:
    If you want to reduce your risk, engage an experienced Buyer's Agent with runs on the board, someone who has travelled the path you want to go down. My thoughts here are...
    • Success leaves clues, depth of experience can be the difference between success and failure
    • Proper due diligence will reduce your risk of buying the wrong site
    • A project feasibility is most important BEFORE you determine what the site is worth to you
    • Off market opportunities are plentiful and is where the gold mostly is. These are mostly handed to Buyer's Agents (generally speaking)

When it's all said and done, those who are diligent with their due diligence - and those who seek expert advice and guidance - will come out on top.

You need to understand that a development site is not just any run-down property that looks ripe for development. There is so much that goes into town planning and understanding local council's strategic objectives and planning - which all play a key role for what you're wanting (or hoping) to achieve.

Property development can be very lucrative if you buy the right site, at the right price, and with the right terms. An experienced Buyer's Agent is the best person to have in your corner at the outset, hopefully someone who has been successful with developing sites and who has depth of experience.

In my travels I have seen many people buy a site thinking they'll be able to get the same permit as the developer down the road, to later discover that the unexpected happened and they are now sitting on a paper loss as the purchased site is no longer viable to develop.

If we can help you with your next move, please feel free to reach out as we have the experience, the know how, and the contacts, to ensure your next project is a success.


Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Stop getting smashed at auctions!

If you're currently in the market to buy property, chances are you're frustrated and even annoyed for several reasons.  You're likely to be spending hours researching the right home or right investment property, one that ticks all the boxes and at the right price.  But then you make an offer or bid at auction and you get steam rolled by the competition.  Frustrating and annoying indeed!

So what can you do about it?

Most people just give up and find reasons to justify their defeat.  You know what I'm talking about... "I don't want to buy in this market anyway as prices are too high and the bubble will burst soon".

The fact is that you can buy well in any market, including the present cycle where property prices are strong.

Buying a home or investment property can be challenging.  When the market is as strong as the present time, it's easy to give up or to buy a substitute property just for the sake of moving on, or for the fear of not missing out.  But if you're crystal clear on what you want and you have a purchase strategy, then I'm here to tell you that you can achieve your goal if you're prepared to ask for help.

Right now the best person to have in your corner (apart from your trusted Mortgage Broker) is a Buyers Agent.  The right professional is what makes all the difference!

I have seen first hand the significant value these guys bring to clients when buying property.  And whilst the service can cost several thousand dollars, their fees are negligible given the significant purchase you are about to make.  In fact I can go on to say, that many of our Buyer Agent contacts have made tens of thousands of dollars for our clients in the last 12 months from buying the right properties.

Remember this.  The best time to buy real estate was yesterday.  The next best time to buy real estate is today.

Here are 3 key reasons why I think you need to engage a professional right away if you're serious about buying the right property at the right price, particularly in the current market cycle:

1)  The hidden market

Many properties are viewed and considered before they are advertised to the public and some acquired without the property ever being marketed at all.

This hidden market is transacted between Real Estate Agents and Buyers Agents.  As they saying goes, it's who you know that counts!

2)  What's the right price to pay? 

Don't be fooled by the quoting range as we all know very well that this is merely a "guide" which is usually blown away at auction.

A home in my area sold for $1m over reserve very recently, which was 25% above the so called "reserve" price.  This may be an extreme example but I'm sure you'll agree most auctions are achieving significant prices above reserve in the current market.

A professional will guide you to ensure you pay fair market price, or they'll advise you to move on and find you another suitable property at the right price.

3)  Create wealth through property

Once upon a time the great Australian dream was to own your own home.  Nowadays, it seems that the great Australian dream is to own a property portfolio!

But be aware, not all properties are investment grade and only a percentage of properties on the market will create wealth for you in a predictable way.

Whether buying your own home or an investment property, the right professional will guide you to ensure you buy a property that will outperform the averages over the long term.  After all, capital growth is key to achieve true financial freedom.

There are many buying strategies that are used to buying the right property at the right price.  If you're out of your depth, engage a professional and get the help you need.


Important information:
This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.