How To Avoid Real Estate Mistakes

Posted on 14/06/2019  

The size and complexity of real estate transactions means there is great potential for errors. And mistakes can be costly in both time and money.

Award-winning Property Mavens buyers’ and vendors’ advocate and best-selling author Miriam Sandkuhler says the best way for real estate consumers to save money, often, is to spend some - on expert advice.

The savings can be considerably more than the cost of engaging the Property Advocate.

Common mistakes made by real estate consumers include these:

Not engaging experts

“It’s often more expensive not to engage experts,” she says. “You might end up with $30,000 worth of problems because you failed to get good advice from a particular professional.

“Speak to mortgage brokers rather than the banks to get your loan in place first.  Before signing a contract get a solicitor or conveyancer to check the contract. Once the contract is unconditional, investors should get a property manager on board and a quantity surveyor.”

Relying on advice from friends and family

“Be very careful who you are taking your advice from,” she says. “Often family and friends can be well-meaning but they can lack experience, insight or knowledge and they can lead you astray.

“If you try to save money and not engage an expert, that can be the difference between a good outcome and a bad one.”

Not planning ahead for future needs

“One of the biggest mistakes is not thinking ahead and examining your needs in 5 or 10 years’ time,” she says.

A couple buying their first home might need to consider their housing needs when they start a family and the location they choose with regard to school zones.

Not knowing how to find the best agent

“Having worked with hundreds of agents, I know that there’s the good, the bad and the ugly  out there,” she says. “I make sure the bad and the ugly don’t get a chance to speak to my clients.”. This is where you would engage a Property Advocate to act as a vendor advocate for you.

Over-spending on marketing campaigns

“You have to understand the minimum amount that’s needed to attract interest in your property, but equally you have to be careful to avoid over-spending,” she says.

“Some agents make money on their clients’ marketing budgets. They’ll always suggest you spend as much money as possible because it’s to their benefit.”

Not understanding the pros and cons of quote ranges

“Vendors often don’t understand the benefits of a quote range,” she says.

Not having a back-up plan re: settlement time frames.

“Settlements can be delayed - there could be caveats – and you need to have a Plan B so you have somewhere to live if there are delays,” she says.

Not buying the right property in the right place

“Asset selection is everything,” she says. “Buy for land value, not land size.

 “The consequences of not buying well can be substantial in monetary terms.”

The difference in the value of a $400,000 property after 10 years depends on the capital growth rate: at 3% it will be worth $537,567; at 5% $651,558; at 8% $863,570; and at 11% $1,135,768. This is where an investment qualified independent Buyers Advocate can add enormous value by sourcing an investment grade property that will outperform the market average.

Not understanding the different prices

“There are three different prices: the price you want to pay, the price the property is appraised at , and the price that you need to pay  under competition,” she says. “It’s important to understand that is going in.”

Failure to do proper due diligence

“If you don’t undertake proper checks, you’re gambling with hundreds of thousands of dollars. Be willing to pay for research and advice to mitigate risk.

“Always inspect the property or engage a buyers’ agent: don’t base your decisions on the photos.”

Waiting for the bottom of the market

“Waiting for a signal that the market has bottomed means you can miss the best time to buy. The best time to buy, often, is when the bank will give you the money – because most people own the same property for 10 or more years so supply of stock turning over can be tight.

“The key is buying the right property, in the right location, with the right attributes, at the right price and taking a long-term view.”

Becoming too emotional

“When people get emotional, they can end up buying out of frustration, over-paying at auction, missing opportunities worth considering, procrastinating and making poor decisions, hoping the market will change in their favour, then having the finance approval fall over (don’t assume it will be extended).”

Renovating before selling

“Sometimes it’s better to leave it to the buyer. Often people don’t want to buy a home that’s just had a newly-renovated kitchen that is not to their personal taste.”

New layer...
New layer...

« Back