Purchased for $46,000 under the asking price.

The Brief

Looking for his first home, Matt (not his real name) had already narrowed down the search criteria to just 4 suburbs in the Sutherland area that he wanted to live in. The property also had to be close to public transport,  not on a main road and away from flight paths.

Renting a 2 bedroom apartment at the time and wanting more space to have a room for a music teaching studio, we knew that the property we find must accomodate for all of this. Further discussions revealed that Matt didn’t want an apartment and the property had to have a minimum of 3 bedrooms, 2 bathrooms and 2 parking spaces all with a maximum budget of $870,000, which would be a challenge to meet in terms of the property type and to satisfy the suburbs and location criteria, but we were up for the challenge.

Market Conditions

During our search for Matt, the market was relatively slow and we had encountered many vendors asking unrealistic prices for their properties. They may have been able to achieve these asking prices previously, but it seems they had not been educated on the slower market conditions and that their prices should be adjusted accordingly.

As a result of the slower market conditions, many people were holding off on selling their properties too which resulted in stock levels being at record lows. This meant that there was also less suitable properties for our client. In these situations, many people find it difficult to find a property that meets their needs and within their budget or they end up paying too much for it – but not for Aus Property Professional’s clients.

Due Diligence

It was time for us to begin our due diligence for this clients property search. We prepared a thorough client brief which contained an extensive list of Matt’s ‘must have’ and ‘preferred’ items. From here it was time to commence the search, looking at properties listed on market and also contacting real estate agents and vendors directly to locate suitable properties that we could get that were not listed for sale.

Once we had narrowed down the list, we arranged to inspect every suitable property with our detailed property inspection checklist and client brief in-hand, which we then presented to Matt. This is to help our clients see what ‘must have’ and ‘preferred’ items each property ticks. Following this process, Matt was then able to make an informed decision on which properties to shortlist and which properties to eliminate from the list.

Further due diligence was carried out on the shortlisted properties. This included speaking to council to see what developments were happening around the area and if any, whether they will have any direct or indirect impact, performing market research on comparable properties, both for sale and recently sold (within 6 months), inspecting the properties at different times of the day to view street appeal, how busy or quiet the streets were and to see what rooms were affected by light throughout the day, just to name a few.

Challenges

With most property searches, there will be some challenges to overcome and that’s where Aus Property Professionals can help. We have the experience by doing this on a daily basis. With this particular client, his brief and budget would not suit his desire to have a freestanding house which was also relatively new with little or no work to be done, so it was time to educate him that we could find a townhouse that was large and just like a house.

The property that we shortlisted was a brand new 4 bedroom, 2 bathroom townhouse which was the only 4 bedroom available in the area and the most spacious too. Understanding that our clients budget was $870,000 and the vendor was asking $900,000, we knew that we had to negotiate heavily on this one to secure the deal.

During our initial inspection of the property, we had discovered some minor issues that needed to be rectified. Things like silicon around the kitchen bench top inadequate and some loose switches, so we made sure that all of these issues were fixed before settlement for our client.

Another challenge came up, which was the actual title of the property that was going to be delayed and this would impact our client significantly as his lease was ending soon. We were able to resolve this swiftly by speaking to council, the LRS and our clients solicitor on a regular basis to speed up this process. It didn’t help that the real estate agent was quite difficult to deal with too and that is why having a buyers’ agent on your side of the deal is crucial.

Negotiations/Acquisition

The property we found was an off-market opportunity, a 4 bedroom townhouse with 2 parking spaces, 2 bathrooms and a good sized courtyard. Positioned on a quiet cul-de-sac within close proximity to the station in the exact suburb Matt wanted to live in, ticking most of his brief. Being larger than some of the more expensive houses we found and also brand new, ensured that Matt was getting great value.

The vendor was asking $900,000 for the property, but given Matt’s budget was $870,000 we were determined to secure the deal for under market value, which meant we had to use our strong negotiating power on this one. We wanted to get it for under $860,000 to keep it well within our clients budget, so our offers began lower than this to give us room to play. The vendor and agent were continuing to push for for a higher price, however we stuck to our lower offers.

Given the slower market, this worked in our favour in that we could take our time ensuring our client would get the property for the right price and did not pay too much.  The result, securing the property for $854,000 which was a saving of $46,000 under their original asking price and $16,000 below Matt’s budget. This was less than what many 3 bedroom townhouses were selling for in the area, which resulted in a very happy first home buyer.

Our work didn’t end there. We also assisted Matt in arranging insurance on the property at a very competitive price, set up his utility accounts, provided guidance on moving and assisted with everything through to settlement.