Common mistakes by real estate buyers.

Many of our clients come to us after a string of disastrous attempts to navigate the property market themselves. Here are some examples of common mistakes that we come across.

• Giving the selling agent too much information. Putting you at a disadvantage when negotiating.
• Not giving the selling agent enough information. How many people have missed out on a property because the agent did not know they were interested? The art is in knowing what to say and when.
• Panic in a rising market and buy foolishly. As Louis Christopher said last week, “Remember lemons are very hard to sell in bad markets." But we see plenty of them selling at the moment.
• Panic in a rising market and don’t buy at all. Of course the market will level off at some stage, but how much will prices rise before that happens?
• Keep increasing their offer without a counter-offer from the vendor. This is not the way to negotiate with an unrealistic vendor.
• Leave too much time between getting an offer accepted and being ready to exchange contracts. And leaving the door open for another buyer to snap it up.
• Allow the auctioneer to create a rhythm. Before you know it you have bid over your limit.
• Let the fact that other people are bidding confirm what the property is “worth”. Instead of doing your own research.
• Believe what the agent is quoting for a property. Buyers largely determine what property sells for in this market and there aren’t many that tell the agent what they are prepared to spend.

There are many pitfalls for the unwary and the weary. And it is so easy to get caught up in the general frenzy and lose sight of what represents value for you.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Why we recommend property investors engage a managing agent.

I could manage my own investment properties but choose not to. The reason is that tenants have a whole bunch of rights and landlords have a whole bunch of obligations that most are probably not even aware of. So, a good property manager can help keep you out of tribunal (or represent you if necessary) and ensure that your interests are protected at the same time. It’s not just money for jam…

Also, even though I have often lined up my own tenants, I always pass the management onto an agent so that I can keep at arms length. I am busy working in my own area of expertise and don’t want to be bogged down with tenant issues (sometimes there can be plenty).

And talk to your accountant, as management fees should be tax deductable. You can also get all the bills directed to the agent and get one annual statement which you just pass onto your accountant. Simple!

For more information on buying an investment property in Sydney go to www.gooddeeds.com.au.