You can save a lot of cash by doing some research and learning a little about housing and perhaps auctions and land values.
- If you want to buy at auction, attend a few first; get the feel for the way they work. In hot markets the bidding can be furious, but remember not all bids are genuine. Some states allow vendor bidding, this is an agent bidding up the price to try and get some momentum going.
Be very clear about exactly how much you will spend, and ensure you have your bank finance in place, because when you enter into an auction it is legally binding. You can’t be the highest bidder and then change your mind.
In a slow market the auction process can give you a sense of how low the vendor is prepared to go. In these markets most houses are sold after the auction.
- Know the area and the mean price (average price) of real estate. If you can find a house in reasonable condition that is well under the mean value, you are likely to have a good deal as long as the property is sound.
It does require some research to be clear. E.g. in one stress in our area the mean value on one side of a particular stress is about $1,100,000 but on the other side of the street it is only $750,000. Why because one side of the road has sea views.
- Be careful of homes that back on to a park or have an easement running along the back alignment. These areas while appearing to offer extra privacy are a greater security risk and your insure mar require extra security measures.
Check your local authority for historical water levels. Has the property ever flooded. Don’t let looks fool you. The peak height of most floods are beyond the comprehension of the untrained eye. One property we owned had a water easement behind the property. It was 30 yards wide and 1 yard deep. We felt secure until it filled the first time we had torrential rain. All that saved us was that the water ran away quickly and never broke its banks.
- Have the property alignments properly surveyed if the boundary pegs are not present or if you have any doubt about the accuracy of their location. A buyer recently spent $4,000,000 on a beautiful rural property only to discover later that the expensive gates and front fence where outside his property and the water course was a council easement.