Ep 47. Non Negotiables for Property Buyers in 2024!
In this episode, Michelle discusses her 10 non-negotiables for buying property.
Here’s what you’ll learn from today’s episode:
Michelle explores the various research you should be undertaking
The importance of working with a quality team.
Why due diligence is of the utmost importance.
The importance of getting your financials in order.
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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Please note that any views or opinions presented in this podcast are solely those of the speakers, and do not necessarily represent those of any business. These views and opinions are general in nature, and do not take account of your personal objectives, financial situation and needs. Please consider whether it applies in your circumstances and seek professional advice wherever appropriate.
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VIEW TRANSCRIPT
Welcome to another episode of the Buy Your Side podcast, the property podcast to help you make smarter property buying decisions. My name is Michelle May, and I am the principal of Michelle May Buyer’s Agents here in Sydney. Now, as the year is coming to a close, it’'s nearly Christmas, I just wanted to leave you with my top 10 tips if you want to be a property buyer in 2024. There's going to be a bit of a downturn, people are going to be on holiday, but you can never get ready too early, so listen up.
My first number one is do a financial detox. Really look at your spending very carefully and see what you can do away with for a few coming months because when you come to put in your financial papers to the broker, they'll be looking at every single thing that you're spending your money on, and in order for you to maximise what you can borrow, you've got to be smart about what you're spending. So do a financial detox. Do you really have to have 3 uber eats in a week? I know that it is tough out there, so I'm making a joke, but I understand that we don't actually have a lot of disposable income. But just think about where you can shave off a few dollars here and there, and you'll be surprised how much a difference that will make in terms of your borrowing power.
Now the second thing I want you to do is talk to a broker. So instead of going to the bank that you've been banking with since you were a teenager or your bank your mum and dad are banking with, really talk to a reputable broker. Now, like in all professions, not all brokers are made equal, so it's really important to pick someone who actually understands you as a buyer because some brokers will specialise in people who are self-employed, some will work with a lot of first home buyers who are using one of the grants. If you're a single parent, do they understand who they have to talk to in order to get you the best possible deal and for you to be able to be eligible for these grants? So make sure you get a good broker if you are unsure how to find one, because really, Patricia from the hairdressers down the road and your cousin Nicholas who you haven't seen since you were 15 may not be the best referees, they may have only bought one property in their lifetime. So if you want a really good broker, do get in touch with us. My team and I work with a team of brokers, and let me just say that I'm completely independent, so I would only recommend someone because they're excellent at what they do, and we see a lot of mediocre and very much subpar brokers out there. So if you want a recommendation, I can certainly put you in touch with a number of really good brokers. Because it's really essential that they understand who you are as a person, what you're trying to achieve from your purchase, and get you the best possible deal.
Now point number 4 or number 3, actually, why are you buying? Have you actually asked yourself that question? And it may be as simple as you want to get out of the rental market. Renting is a really tough, you don't have a lot of security. But think about also the length of time you want this property to last for? Who do you want to be buying with? You know, are you borrowing from your mum and dad? Is it a gift? All these kinds of questions you really need to be asking yourself before you make the decision to actually go ahead with it, because it needs to make financial sense. I always say that if this property only has to suit you for the next five years or less then it's probably not worth buying because the cost associated with purchase and then again with selling are going to far outweigh the actual benefits of any capital growth for example. So then you actually might be better off renting for that period of time. So do your numbers. Just really question with yourself. Why it is you're buying and whether it's actually going to suit you?
Point number four is research the sold section of domain and real estate and the big portals to find out what you can actually afford with the money that you can borrow and does that match your expectations or your needs. Because if they don't, if it's quite obvious that you want to live in Marrickville and all you can afford is a studio or a 1 bedder and you are a family of 4, then something's going to give. So are you going to be able to get more finances by way of extra jobs or gifts or grants or anything like that. Or are you going to move elsewhere to get a property that's suitable for your needs. So researching the sold section is something I find incredibly valuable. We do iit all the time to get ready for new searches, because that's the most accurate picture of the market as it is as close to possible as it is to today.
Hand in hand with that point 5 is listen to this podcast and get yourself prepped and armed with some knowledge. I hope that my episodes help you think about things that you hadn't really considered, I mean you simply don't know what you don't know. I don't know if you're aware, but I also used to co-host a podcast called Sydney Property Insider and the episodes are still on all the bigger podcast portals and there are also many of them that you might find helpful. We talk about different suburbs and statistics, we have very interesting guests on that show. So my point is get your knowledge from reputable media outlets and please don't listen to any of those podcasts that are rich quick schemes hosted by twenty year olds with no socks on. Unfortunately the property journey is not a very sexy and quick one if you want to do it right. So take it easy, really think about the risks, and listen to podcasts to just really get yourself across the language of property and the art of things like negotiations and research into stratas for example.
Number 6 please choose quality over quantity. I can't tell you enough, and I've said this many times before, go for very simple properties that have stood the test of time as opposed to something that's shiny and new. I have a rule within our business that we don't buy anything less than five years old when it comes to apartments because you don't have enough knowledge of the build quality, and there isn't without reason that we now have a building commissioner who is looking at all these new buildings across the state and finding that over fifty percent have major issues whether it is on the level of structural issues in basements on which the whole building stands or whether it's waterproofing or fire orders. It isn't just in Sydney, it's across New South Wales, and I imagine across the country, as the build quality has fallen and the margins for builders have fallen kind of go hand-in-hand for private certification. There's so many reasons why this is happening, but please don't take that risk, it's simply not worth it.
So quality over quantity, that also goes hand in hand with location. If you really want to live in a particular suburb but all you can afford is the main highway through that suburb ie the yellow road through that suburb, please don't buy on it because it's going to hamper your capital growth. Your nest egg is not going to grow at the same rate as everybody else’s who live in quality locations within that suburb, which means you're actually losing your tread on the rung of the ladder because you're actually going to be left with. Whilst you think you're making money, you're making less money than everybody else, and it also hampers your enjoyment of living, like who wants to live in an apartment or a house where you can't open the windows for fresh air because you know there's trucks racing past day and night. Think about those things, you're better off moving out a suburb, or two even, but know that you've actually got a quality quiet location.
So that was number 6. Number 7, much like getting a really good broker you also need a really good conveyancer or solicitor. Again, they're not all made equal. We come across many of them, and I will tell you that? Um, yeah! It's important to pick someone who is on your side who is someone who is knowledgeable, and who doesn't put, as we say in Holland, salt on every snail. It doesn't kill the deal by making so many changes or requesting so many changes to the contract just because they go on to flex their muscle. They want to be commercially savvy as well as explain to you why they're asking for those changes on your behalf or recommending that we ask for those changes on your behalf again. Same thing if you don't have someone that you know is someone great, not just because Gary from the office bought a property once and thought that ‘James was okay’ so therefore you should use them. Please don't do that! Look at Google reviews, look at the amount of business that they do, or get in touch with us. I'd be happy to pass you a list of people that are fantastic about what they do.
Now number 8 is you want to make sure that before you go out there, you start getting on everybody's mailing list. So I recommend you set up a dedicated email where all the agents will send out their listings, but most importantly, also their sold section. So very often after the auctions on a Saturday or midweek they'll send out an email to their database and will have those sales that are undisclosed on the main portals. Quite often they will have the price in those emails so make sure you are on those mailing lists. But I would recommend getting a separate email account for that because you might get a few, so you don't want to end up with them within your spam. And if you get a pre-market email, then you might be in before everyone else so it's worth worth doing that.
Point number nine would be get my Inspection Hack List. The checklist is on the website, the Buy Your Side website, you can download it. It has lots of helpful pointers about what to look out for when you're either inspecting an apartment or a house and then you can make it like it's really a job. I was talking to someone the other day and I said oh you're really like a project manager. It's a full time thing and you've got to be very rigorous about it, therefore maybe this inspection hack list might be just your thing.
Going back to point number 8 when I said about the sales that are disclosed in those emails, maybe consider starting a spreadsheet just to see whether there's a running theme in terms of sales. So if you're looking for a two bedroom apartment, what do two bedroom apartments generally in that suburb or even that particular building sell for. The more organised you are, the higher the chance of success. So you you can't start too early!
With that, point number 10, and I think this is the most important one, they're all important, but please please please do not buy an apartment without reviewing the strata report. Do not buy a house without getting an independent building and pest report, and actually, if you are buying a strata apartment or townhouse it's always good to get a building and pest on top of the strata as well. In theory the strata fees, the levies that you pay per quarter, are for the maintenance of the complex, but it's always good to get just a little bit of independent advice on what is actually happening in the apartment or townhouse that you're looking at so my recommendation would be to get both. And for a house absolutely get an independent building and pest. If you're not familiar why I always say that, because the building and pest reports that are commissioned by the viendor and the agent are very scant on detail in my experience. They are usually the franchised method copy and paste kind of thing. They're very scant on detail, like I said, and they're paid for by the person who's trying to sell you something. So of course they're not going to tell you that the place is going to fall down in three months with termites. Which as a matter of fact has actually happened to us this year where we looked at a house in the Inner West and we got the building and pest because it's free, and we always had the intention of getting an independent one. That building and pest did not mention anything about termites, did not mention anything about the inadequacy of the roofing structure; which both things were picked up by our building andpest inspector immediately, and he actually did an SOS call to me and said absolutely please tell your clients to not buy this property. So we walked away not having spent two point three million dollars on this particular house, but some other poor bugger did, and if they didn't get an independent building and pest, they're probably in for a rude awakening when the roof starts sagging in. So, do yourself a favour, I know it's another cost in this property journey, but I personally think that you cannot skip this step.
So I hope this top 10 has been helpful.
These are sort of my non-negotiables, my please do not break those rules! Do not go shopping without your wallet, do your research, buy quality, get a quality team around you, and do not skip any steps because you're making a huge financial decision. Why rush that? I know I read research somewhere where people spend more time researching what car they're going to buy than actually the research and due diligence on a property, so please don't be that person.
I hope you have an amazing Christmas with your loved ones. Eat lots of good food, have lots of nice drinks, enjoy the sunshine or the snow, wherever you may be; and I look forward to having more episodes next year and hopefully help you on that road to property home ownership. Thank you for listening. It's been my absolute pleasure, till next year.