10 years on one page.
Some lessons we have learnt
about buying fabulous houses
which could help you.
10 years ago, David Morrell and Christopher Koren formed Australia’s first firm of specialist buyer’s advocates. Since then we have dealt with a huge number of home buyers, investors, estate agents, builders, developers, valuers...
We have bought a staggering variety of houses, apartments, development sites, bathing boxes...
Here is some of what we have learned.
1. Impossible-to-find properties can be found.
10 years ago, auctions were it. Today, around half the houses we buy are not even listed by agents.
Especially at the top end, vendors avoid the hassles of agent selling. They don’t want parades of strangers tramping through their houses.
Now much of our time is spent is uncovering the gems in the hidden market.
2. 'Live’ where you’re thinking of buying.
Is this the right house for the way you live? Is the floorplan workable? Is the garden? Is the district?
If not, moving day will be a terrible awakening.
Use your imagination. ‘Live’ in the house, in your mind, from morning ’til night.
How well is the kitchen laid out? Will there be a crush in the bathroom? How will you get to work, shops, schools? Is the garden pleasure or pain?
(We've developed a checklist to help you with this. It's downloadable here.)
3. When the "Wow!" fades.
You need Wow! If you’re not in love with a house within a few minutes of walking inside, walk out.
But Wow! can mislead if it persuades you to overlook more fundamental needs.
In restaurant terms, "Wow!" is the aroma of a fabulous sauce. Think again about the steps suggested in 2. and make sure the whole meal lives up to your first impression.
4. Price. How much is too much?
Too much is more than replacement value, more than comparable properties are selling for in comparable areas or more than you want to pay.
Too much is, in negotiation, the figure an estate agent will suggest. Too much is $1 more than a vendor would have been prepared to accept.
How can you find out what’s too much?
Checking with competing local agents, who probably know the property, can provide clues. Buying local market reports (providing you’re comparing apples with apples) can be a big help. Keeping a close eye on similar properties in similar streets will, in time, give you a reasonably accurate feel for what’s right.
5. Avoid fumbled catches.
You can go through everything it takes to find exactly what you are looking for only to lose it to another buyer at the last moment.
Fair enough if that’s someone with deeper pockets at an auction. But if it’s a private sale or post-auction negotiation and a price you would have paid, you may just be left wondering.
You could blame the agent, but chances are that if you had known more, you would have succeeded. (And see Spot The Dummy.)
6. Stress. You don’t need it.
Homework helps lower the stress. When you know more than other buyers, when you have the funds and the strategy, that will add confidence.
But (plug coming), a lot of clients hire us simply because they know we will cure their stress. We’re not emotionally involved. We won’t be snowed. That can be a huge relief. (End of plug.)
7. Finding value at $1,000,000 +
(Another plug; but if you are spending over $1,000,000, you need to know this.)
You have no doubt heard that the market decides how much a house is worth.
You may not have heard that, at the top end, Morrell & Koren is the major force in that market.
We are involved in a huge proportion of upper-end sales. We know precisely what’s available and how much will secure it.
8. Investment. Get rich deliberately.
We have seen too many people rush out of the latest seminar and into their biggest mistake.
We also work with many investors who are in for the long haul. They do the research, they understand the market, its highs and lows, the strengths and weaknesses of different districts, building styles, financial arrangements, regulatory environments ... and then they wait.
Patience is more than virtuous; it is profitable.
9. Shock! Horror! Real estate agents are not
always reliable sources of information!
The games played by agents. They’re Legends.
The dummy bids still lurking in bushes and being plucked out of the air, the phantom buyers who are now haunting private sale and post-auction negotiations (we’re still their nightmare).
Agents will help themselves to as much of your money as they are able. If you cannot assure them that once you have bought you will in turn give them your old house to sell, they may try to prevent you buying at all. (The only thing better than this commission is this commission added to the next.)
And beware the estate agent who would be your friend. If he or she is such an excellent person and you have so much in common, you can have a great friendship - starting just after settlement day.
10. Impulse is not your friend.
People are emotional. You are emotional. People buy houses for the wrong reasons and only realise the dimensions of their mistake the day they move in. Floor plans that don’t flow, rooms smaller than they remember, neighbours from hell. ‘Perfect’ houses which need masses of money.
You need someone to advise you; who sees the faults as well as the promise.
Someone who can save you from you.
11. The perils of exhaustion.
The people who have been looking for so long they have become desperate.
Their expectations have slipped along with their judgement. They have been on the treadmill of too, too, too many open-for-inspections and too, too, too much disappointment.
That’s you? Take a break. Or get help.
12. "I saw it. I bought it. Trouble."
"I was driving past the auction. I just stopped and bought it."
Please, don’t (see 10.)
There are the lifestyle considerations (see 2.). There’s the inspection you need to find the rising damp, the rotten stumps, the dangerous wiring ...
All the terrors that add up to a lemon.
Don’t. Just don’t.
13. Judging good buyers’ advocates.
They have confidence in their abilities. They publish their fees.
They don’t ask for retainers. (Why would they if confident of success?)
Satisfaction guarantee? Yes. They won’t charge until you are happy.
14. Buying at the top end.
$1,000,000+ is a different world.
It’s more private. At the very top end most of the action happens without an estate agent being involved.
Open-for-inspections are rare. Negotiations are often between solicitors.
If you are not a frequent swimmer in these waters, you are well advised to get help.
And see 7.
