Wondering what questions to ask a real estate agent when buying a property?
If you are new to property investment the real estate agent, who represents the seller, is an important source of information about the property and their client. This is why it is crucial you are well prepared and get an in-depth understanding of the neighbourhood and the property you are inspecting.
With this in mind let’s cover everything you should be asking a real estate agent, so you can make an informed decision on your property purchase.
Knowledge is power, so the more you know about the owner of the property, and why they are selling the better. It could give you valuable bargaining power when it comes time to negotiate the final sale price. If the owner is, for example, moving overseas or even interstate, they could be open to a slightly lower offer if timing their departure is a factor. Owners who have already purchased another property may also be more flexible on the final sale price, and want to progress the sale to free up some cash.
This is actually an important question, because properties that have been on the market for a few months or more could have a problem, or be overpriced. Problems to look for include structural issues, like persistent rising damp - which could require expensive remedial works. If you are looking to buy an apartment or unit it is essential to conduct a strata search, which gives you an insight into the health of the scheme’s finances. You should find out if there are any major projects in the pipeline, like replacing a lift or rectification works, which you would be liable to contribute to as a lot owner.
An agent who services the local area will have an intimate knowledge of the property market, right down to the street level. They will be able to tell you how desirable the location is, and useful details like which school catchment it is in and how close local amenities are. Last but not least, they will know what similar properties have sold for in the area, current market conditions, and if the asking price is fair. You can cross reference what they tell you with online sources, which have suburb profiles and track historical growth rates.
A local real estate agent will know in advance of any developments planned for the local area. Depending on the project, these could impact local property prices in a positive or negative way. A new shopping centre, transport infrastructure or source of local employment would all increase the desirability of an area. On the other hand, being too close to an airport runway or major road would be unpleasant and intrusive, and information you would want to know about beforehand.
Neighbours, good and bad, can make or break your experience of your new home, so it makes sense to get an idea before you make a purchase decision. If you have young children you will want to move to an area with a similar demographic, and know other families live close by. In the same vein, if you appreciate a quiet area, confirm with the agent the type of neighbours and noise levels on the street.
Easements are basically laws which restrict what modifications or developments you can make to a property. These are often, though not always, detailed on the certificate of title of the property. An example of a right of way easement would be a driveway shared with your neighbour, which would prevent you from obstructing it by, for example, planting a tree. If you have an electricity or telephone pole on your property, a service easement gives access to service personnel to maintain this. Light and air easements restrict you from impacting the light or view of neighbouring properties, by planting a large tree or adding another storey to your home. These are all scenarios you would want to know about, so it is worth asking an agent if any exist on the property you are interested in.
If a property has been renovated recently, it could have changed the value of the home - and impact the sale price. Some sellers may try to use this to improve their sale price, so it is worth clarifying with the agent what works were carried out. You should also confirm that any recent works have been carried out legally with the appropriate council approvals. An unauthorised building work could be unsafe, and could result in expensive legal proceedings to get remedied.
If you are an investor looking to rent your property out to tenants, having an idea of the potential rental yield is important. The net rental yield is essentially the difference between your income from the property (weekly/monthly rent), minus the total cost of holding and maintaining the investment. This is often expressed as a percentage, a figure which you can research online based on the size of the property and its location. Agents will have a good idea of current asking rents in the area, and should be able to share this information with you.
Each locality has different rates, based on the local council and size of a property. These go toward the upkeep and maintenance of local roads and services such as garbage collection. Knowing the approximate outlay you will have to make on rates, typically paid quarterly, allows you to budget for this cost.
Last but not least local real estate agents will know which properties in the area have sold recently, and for how much for. Comparable sales allow you to judge if the asking price of the property is fair, and can help determine what offer you make.
You should now have a good idea of all the questions you should be asking an agent before you buy a property, so you can make an informed decision and decide what a fair price is to offer or bid.
Have more questions about buying your first property? Get in touch and our team will answer all your questions at a time that suits you.