Six things to ask yourself before you sign that contract

In this energetic, fast-paced seller’s market, peppered with lockdown restrictions and sudden announcements, many buyers are acting impulsively, and some are acting irrationallly.

Whether it be time constraints, a huge dose of FOMO, or sheer fatigue, buying a property deserves a thoughtful approach. More now than ever before, we’ve seen and heard of some impractical purchase decisions, and it is likely that many of them will end in regret, financial losses and lost opporutnity.

So what should buyer be asking themselves before they purchase a home?

Is this property matching my ‘must-have’ criteria list?

We always step our buyers through a strategy session prior to searching for property. The strategy session not only aims to design a realistic and feasible search, but it helps us all highlight the items on the wish-list, separating them into ‘must-have’ and ‘nice-to-have’ criteria. If a property excites our client, we ensure that it meets all of their ‘must-have’ criteria. If any items are lacking and cannot be retrospectively added/built, we reject the property altogether.

Can I anticipate being happy to live here for at least five years?

This is an important question and it relates to future-proofing a home. If a buyer is so exhausted by their property searching that they are prepared to consider a shorter-term option, they should rethink their approach. The purchase costs, selling costs and marketing fees associated with a short tenure can quickly deplete their equity position, leaving them in a compromised financial position when it comes time for their subsequent purchase. The purchase is far too important to be rushed with a short-term option.

Some people spend more time planning a holiday than they do a home purchase.

Is the price tag supported by recent comparable sales?

Rushing in and selecting a property due to its ease of purchase is a mistake. In a seller’s market, it is fair to anticipate that a good quality property will likely take time and effort to secure. Aiming for the lower hanging fruit just to minimise time is not a good strategy. The low hanging fruit, (or in other words, the properties that are floating around for sale for weeks and/or months) are likely to be compromised. Whether it be a difficult location, a non-residential zoning or an inflated price tag, (among other things), the low hanging fruit can be troublesome when it comes time to getting the finance.

Before agreeing to a price and signing a contract, buyers need to carefully work through their comparable sales analysis to ensure that they are paying the right price.

Who is making the ultimate purchasing decision?

All too often when exhaustion and fatigue sets in to a property search, loved ones jump in and get involved. There is a fine line between getting help and getting what you didn’t actually want. The best of intentions can sometimes steer a project in the wrong direction. Buying a home is a project that requires the decision-maker to be at the helm at all times, and they need to be willing to speak up and redirect their helper back to their criteria list when things feel murky.

Have I had a legal professional review the contract?

“No review, no purchase” is one of our favourite sayings. Despite the fact that we read contracts every day and feel very familiar with much of their contents, we never proceed without a legal professional’s thorough review of the contract. From title searches to interpreting conditions and all things in between, a legal review can potentially save a buyer from making significant mistakes.

Do I have my funding in place?

Not only do we insist on a credit-assessed pre-approval, but we also discuss the availability of the deposit funds. Committing unconditionally to a contract when the deposit funds are not immediately available is fraught with danger. No buyer wants to risk their deposit by finding themselves in default of the terms of the contract. This includes being aware of daily transaction limits, enabling savings to be free from long term deposit arrangements or share portfolios, and ensuring that any equity release required is well underway.

Embarking on a home purchase is a big step and deserves the attention and effort it commands.