Getting Ready for a Saturday Morning of Inspections
Michelle gives us a full week’s preparation for a Saturday morning full of inspections. Where to start, and what to do for the best use of your time.
HERE’S WHAT YOU’LL LEARN FROM TODAY’S EPISODE:
- Preparing during the week;
- Checking out the sold listings;
- The street traffic;
- Mapping out the day; And
- Much More
LINKS OR ARTICLES WE MENTIONED:
- None
SPEAKERS IN TODAY’S EPISODE
Michelle May – Sydney Buyers Agent
Marcus Roberts – Mortgage Broker
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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.
Transcript
| Marcus Roberts: | Hi, and welcome to the Sydney Property Insider podcast. This is episode seven and today we’re talking about getting ready for your Saturday morning inspections. Michelle, how are you this week? |
| Michelle May: | Good morning. How are you? Yeah, good. |
| Marcus Roberts: | Good. So this week in the news we saw a number of, a much larger number of properties in the weekend’s results that had a clearance rate of 70%. |
| Michelle May: | Yeah. So over 400 properties went to auction. And that’s sort of the number that we were waiting for, because previous weeks the numbers were really too low to get a clearer idea of what was happening in buyer sentiment. |
| Marcus Roberts: | Yes. |
| Michelle May: | So 70%. It’s healthy. It’s, you know, so anything from 70 really is a seller’s market. So I went to auction myself for a client. Five registered bidders and what I see happen time and time again, it ended up between two people. One was the bank of mum and dad. Dad was buying it for his daughter, and then another local buyer. They went head to head. Increments of 1,000, 3,000, but in my opinion they ended up overspending by about $100,000. |
| Marcus Roberts: | Really? |
| Michelle May: | Which is quite scary. Yeah, really quite scary. When you go to the bank with the result of an auction, the bank might question the auction result when it’s that much higher and so you could end up with a shortfall when the bank values it. |
| Marcus Roberts: | Absolutely, because when you go to the bank the bank’s going to ask for a valuation in most cases. |
| Michelle May: | Yes. |
| Marcus Roberts: | So if they are reliant on getting a loan from the bank, the bank’s going to look at the valuation. If it doesn’t come up to the amount you’ve paid for it, then you may have an issue and you may need to find, you know, another source of funds. |
| Michelle May: | That’s right. And these guys who bought it, obviously the dad I assume is using equity from his current home or has the cash in the bank. So, you know, not the risk there as such but he still overpaid by a vast amount. So be careful. Don’t get caught up in that thinking that just because you’re increasing your bid by only one, three, five thousand dollars, look at the total amount. It keeps going up. |
| Marcus Roberts: | Yeah, absolutely. And one of the ways that you can do that is by preparing ahead of time and getting ready for Saturday mornings. |
| Michelle May: | Yeah, that’s right. Absolutely, yeah. |
| Marcus Roberts: | So, yeah, which is then that was very professional. Wow. |
| Michelle May: | That’s a very good link. That’s … wow. |
| Marcus Roberts: | That is … wow. I’m going to put that in a photo frame for life, that one. So, Michelle, tell me about your Saturday mornings and your preparation for going out. |
| Michelle May: | Yeah. So, I mean, obviously, you know, I do this for a living and I do this for my clients. So the first thing I make sure that my clients have in place is the pre-approval. You know, I don’t do any work for them until they know what is in their kitty to spend. There’s absolutely no point looking at stuff without knowing what you can actually afford, what the bank is prepared to lend you. You know, and what, I’m trying to say, criteria are involved with that. |
| So, you know, in order for you to borrow a million dollars, are there any, you know, clauses that the bank will want you to fulfill before giving you the loan? So once you know what you can spend, I’d say, “Okay, well, what is your number one neighborhood? Where would you like to be and what you like to buy?” But then start exploring the other neighborhoods around it. | |
| Marcus Roberts: | Yes. |
| Michelle May: | You know, because they might offer you much better value for money. So go down the train line, have a look. You know, what is the next suburb that could offer you possibilities. So, for example, in Sydney, Newtown is a very popular suburb. Also one of the more expensive suburbs in the inner west. But you go down and have a look around Marrickville, for example. Very similar vibe, very similar culture, very similar types of properties. It offers you better value. So- |
| Marcus Roberts: | You’re shaving a couple of hundred grand off the purchase price easily. |
| Michelle May: | Absolutely, absolutely. Yeah, so, you know, have a look. Explore your city. You know, become a tourist in your own city, I would say, because I’m always surprised at people when they start looking at areas. I’m able to offer them, you know, opportunities in different suburbs that they never even realized were there. So- |
| Marcus Roberts: | Yeah. And just expanding on that, I know that when I’ve spoken to clients in the past about doing their inspections on a Saturday morning, and they’re going to a suburb they might not never have thought about before. But they’ve got it on the list and they’re off to do it. If it’s a property that you really like and if you’ve got a good feel from that house or from the apartment itself, you know, have a coffee there afterwards. |
| Michelle May: | Absolutely, yeah. |
| Marcus Roberts: | You know, sit down and just get a feel for what the suburb is like. |
| Michelle May: | Yeah. |
| Marcus Roberts: | Have a little walk around the street. Go around the corner, see what’s around. You know, is there a local 711? Is there a corner grocery store and similar? Are there cafes? They’re the things that are important to you in the local area. |
| Michelle May: | Yeah, yeah. Because I think it’s important to feel comfortable, you know, where you’re living. So is it your kind of people? You know, is it your tribe, if you like? And do you recognize yourself in the people around you? That’s what ultimately will allow you to enjoy where you live more. |
| Now, another thing to do is to look at achieved sales. So both Domain and realestate.com.au have this feature. On the top of the search bar, it says Sold. So get a gauge of what the properties are selling for so you can put in the same parameters as you do when you are looking for a property. So the new listings that are currently for sale, they have the same options to do that with the ones that have already sold. | |
| So you can go, “Okay, I’m looking for a two bedroom apartment. I want parking.” And then you can put that in and you can see, “Okay, well this is the kind of range that I’m probably going to have to spend in order to get what I want.” And you can also really gauge that down. So if, you know, it turns out that they were all selling above your budget, what is it that you can actually buy for the money that you do have? | |
| Marcus Roberts: | Yes. |
| Michelle May: | And you can do that, you know, for all these different suburbs. So then you can really, clearly see, “Okay, yes.” Going back to Marrickville, for example, in Marrickville I will get better bang for buck as opposed to wanting to live in Balmain, say. So that’ll give you a reality check, I suppose. Because it’s really important to keep that wishful thinking at bay, you know? |
| Because you can waste an enormous amount of time. In some cases, some of my clients have been looking for years and keep missing out because that wishful thinking just doesn’t go away. You know, they think, “Okay, I have this chance that I can buy this within my budget.” But it never happens. | |
| So keep a file of this information. You know, this will make your search far more productive from the outset. So you’ve got to be quite thorough and, you know, just diligent about what you’re doing. You know, this is a full-time job for me. So, you know, I do this- | |
| Marcus Roberts: | Absolutely. And even for those that this isn’t their full-time job, I guess because of the size of the purchase and the size of the impact on your financial life, you really want to be very clear and cognizant around, you know, the reasons for choosing one property over another. So, you know, that’s a great idea, keeping a file of all the information for various properties. How do you do that? Do you do that through Excel or do you use a different type of program. |
| Michelle May: | I … Yeah. |
| Marcus Roberts: | How do you ultimately, you know, keep it separated so, you know, okay, well this property had this, this and this? |
| Michelle May: | Well, I have my online folder for my clients that they can access. So I use Google. I love Google. It’s got, you know, Google Sheets, Google Excel. So, you know, all these different types of ways of documenting data. Now, because I’ve got my foot on the ground all the time, I know from the outset, yes, I can achieve a two bedroom flat in Newtown for this amount of money. |
| So for me, you know, because I’m constantly looking at the sale prices, I get all the emails every day. You know, I don’t necessarily keep a file of the sold stuff but I do keep a file of, you know, this is what I’m looking at this week for my clients. And then I report back with, “Okay, these are the photos that I took.” Which, you know, always ask permission if you’re going to do that at an Open. | |
| Ask permission if you can take photos because it’s a really great way to refer back. Especially if you’re seeing, you know, I see, you know, five, six properties on a day and then during the week also. So to be able to look back at these photos and go, “Okay, oh yeah, that’s that one.” And this is why I don’t like it or this is why I do like it. Because obviously it’s a very filterless way of seeing what’s actually happening in the property. | |
| Marcus Roberts: | Absolutely. And especially when you look at the filters, sorry, you look at the photos that you take, after asking permission, of course, against the photos that have been put up by the real estate agent or by the vendor. They’re usually Photoshop and edited to show the absolute best that it can be. And having the reality check there as well. Which, after seeing eight properties in a morning, you might forget which one was which. |
| Michelle May: | Exactly, exactly. So, yeah, do that absolutely. And then, look, your Saturday prep should really start on the Wednesday or Thursday. So Thursday and Fridays is when most new listings come on, so when you run all the alerts, not just on Domain and realestate, but get yourself an older agency alerts as well because a lot of them will send you pre-market links. Which means that you get a heads up before the property hits the market. |
| You know, when you get those emails coming in, then on the Friday, by Friday evening, you should have a really clear idea of what’s happening. You know, because some Opens, they start at nine so you’ve got to be up, out and ready to go. | |
| Marcus Roberts: | Absolutely. And not just that but some Opens start at nine but then the following one is 9.15 in a completely different suburb. |
| Michelle May: | Yeah, yeah. |
| Marcus Roberts: | So that’s where your priorities around, you know, what is it, which of those two are we more interested in seeing? |
| Michelle May: | Absolutely. |
| Marcus Roberts: | And which one works with the other four that we’re seeing that morning? |
| Michelle May: | Absolutely. So you’ve got to really prioritize. So, you know, you can do a bit of research prior to going to these Opens. So have a look on Google Maps. You know, Google Street View is always something I do. Is it opposite a petrol station? Is it, you know, on what I, you know, call yellow roads. The roads that are busier than others, you know? |
| Because then you can already discard them before going through them. You know, so you can go, “Okay, no, that’s not for me.” But try and get through the first Open because that’ll give you options down the line. Because if you do decide that that’s the property for you, then the sooner, you know, you can start doing your due diligence, getting your contract reviewed. If there is an opportunity to buy it before auction, then you’re ready to go. | |
| Marcus Roberts: | And as we said the other week, we talked about, you know, going to the first inspection, going to the second inspection, asking the real estate agent, “Are the vendors accepting bids prior to auction?” |
| Michelle May: | Yeah. |
| Marcus Roberts: | Is something that, you know, you may wish to do in conjunction. |
| Michelle May: | Yeah, absolutely, absolutely. So when you’re at the Open, just take note of the other buyers, you know? Are they, again, also are they your tribe? So if you’re not that familiar with the area, you know, are those people that are going through it the types of people that you can see yourselves hanging out with? You know, they might not buy this one but they might buy the one down the street from you. So important that you feel comfortable with the people that are there. |
| Marcus Roberts: | And this really works both for those listening that are looking to either invest as investors or as owner-occupiers. Because, yes, if you are living on the property yourself then you want to feel comfortable with the other people that are looking at it. You know, the area and so forth. But if you are looking at it as an investor, you want to see who your type of tenants are. |
| Michelle May: | Yeah. |
| Marcus Roberts: | And the people coming through, they’re probably the type of people that would be looking at renting it potentially. |
| Michelle May: | Yeah. That’s very true. Absolutely. That’s a very good point. Also looking at them as your competition. |
| Marcus Roberts: | Yes. |
| Michelle May: | You know, so you’ve got to find who’s your likely competition going to be when or if you’re going to make an offer if you’re going to go to auction. Always, you know, you can’t start your research early enough when it comes to auctions. So have a look around. |
| Marcus Roberts: | So Facebook stalking. |
| Michelle May: | I wouldn’t go that far. |
| Marcus Roberts: | And dress in your sharpest power suit. |
| Michelle May: | No, I don’t advocate stalking, anybody out there listening. |
| Marcus Roberts: | Oh, you haven’t spoken to my wife. |
| Michelle May: | So when Monday comes, this is the follow-up after the Open, you know, when the agent calls, pick up. Pick up and don’t ignore the phone call. And give them honest feedback. You know, give honest feedback about why you may or may not have liked the property. The agent will appreciate it because they are still trying to gain, you know, information about whether this is going to be a good property for auction or not. You know, and whether they have to adjust the price guide. All that kind of stuff. |
| So they’re just trying to hear from you, you know, honestly, what worked for you and what didn’t. In which case, if it didn’t work for you they might be able to suggest another property that they have coming on. | |
| Marcus Roberts: | Absolutely. |
| Michelle May: | And so you get the heads up, you know? So ask for the other buyers’ feedback too because on that morning or afternoon the agent will be calling everyone. A good agent would be calling everyone who’s been through that property on that Saturday. And so you can ask them, you know, “What did the other buyers say?” You know, “Where do you think the price is going? Are you inviting offers this week?” Or anything like that, you know? |
| It’s valuable in terms of finding out, A, where the other buyers see value and where this is going to go. So do you think it’s going to run to auction or do you think there was enough interest there to do something prior? | |
| Marcus Roberts: | A really good point and one that, I must admit, I’ve never actually thought about, which is asking the agent what feedback that there has been from other interested parties. Yeah. |
| Michelle May: | Absolutely, yeah. I mean, they may not give you anything valuable but it’s worth asking. |
| Marcus Roberts: | Yeah, of course. I mean, ultimately they’re working for the vendor. |
| Michelle May: | Yeah. |
| Marcus Roberts: | So they may not give you anything. But at the same time, it never hurts to ask. |
| Michelle May: | Absolutely. So ultimately my final point would be that, okay, you’ve been through the property on Saturday. Don’t make any rash decisions. So inspect the property at another time to make sure it’s still the one for you, and do your due diligence. So strata report, building and pest, contract review, those are the things you cannot be too careful about. You have to spend the money because those reports are worth, you know, finding out whether that property is worth buying, yes or no? |
| Same with a contract review. You need to know what you’re signing up on. So, yes, you’ve got to get yourself organized but don’t rush into things because the way, you know, the Sydney market, it’s an enormous amount of money you’re spending, so- | |
| Marcus Roberts: | And I really agree with you on one of the points you just raised prior to talking about contracts of sale and pest reports. But, you know, of course you’re going to go see the place two or three times. You know, it’s very unlikely that you’d put an offer in on first visit and be done with it. |
| Michelle May: | Well, you’d be surprised. It happens. |
| Marcus Roberts: | Well, that’s not what I want to hear. |
| Michelle May: | No, no. |
| Marcus Roberts: | I want to hear people making better decisions than that. |
| Michelle May: | Absolutely. Well, that’s what we’re here for. |
| Marcus Roberts: | That’s terrifying. |
| Michelle May: | Hopefully, after listening to us, you will go and have another look. I mean, you know, do you know actually that I read somewhere that people spend more money, or more time I should say, choosing a car than they do with buying a house? Now, that, to me as a buyer’s agent, that sounds insane. |
| Marcus Roberts: | Yeah. |
| Michelle May: | So at least just listen to me and go and have another look at it. |
| Marcus Roberts: | And I completely agree with you. You know, seeing the place, I know this from my own experience as well, seeing a place on the second and even third time, especially if it’s going to auction and you know it’s going to auction, there’s not going to be any bids there accepted prior. But seeing the place for a second time gives you that opportunity to go through it a low slower, more methodical and more methodically. And, you know, just sort of lean back against the wall and just sort of survey. And think, you know, is this the sort of place that you would like to live in for a number of years? |
| Michelle May: | Yeah, yeah. |
| Marcus Roberts: | Because again, as you say, you’re going to be living in this for 12 to 24 hours a day, depending on, you know, what your work schedule is like. You’d like to have some more time to think about it rather than just, you know, which car do you buy? Yeah. |
| Michelle May: | Yeah, absolutely. So, I mean, these would be my top points for, you know, going through a property on a Saturday. Obviously there’s a lot more aspects, you know, than the two, you know, for picking the right property and all this kind of stuff. But we’ll discuss that next time, I guess. |
| Marcus Roberts: | Absolutely. And would you agree that on a second or even third inspection, you actually start to see the thorns rather than just the rose? |
| Michelle May: | Oh, absolutely. Yeah, I mean, look, I’ve been doing this for a long time. I pick very quickly. I’m very, very picky, as my clients will tell you. I say no more than I say yes. And they go, “But why?” And I go, “Well, this is just not good enough.” And these are the things you can’t fix, you know? In an apartment, internal light is, you know, paramount. If there’s not enough internal light when you go and look at it in an inspection, you know, I mean, we live in Australia. To live in a bunker is, to me, that doesn’t make sense. |
| I saw two of them on Saturday, you know, and I reported back to my clients and said, “Look, guys, sorry, there was just nothing there this week that was good enough.” So don’t be afraid to just say no and walk away. You know, it’s far more important that you pick the right property than to pick a property fast. | |
| Marcus Roberts: | Absolutely. Yep. |
| Michelle May: | That’s ultimately what it’s about. |
| Marcus Roberts: | Absolutely. So, you know, to sum up my view and to finalize one of your last points about getting a pest and building inspection and have a look at the contract of sale, that really sets up nicely for our episode next week where we are very lucky to have our first guest. And our topic next week will be contracts of sale. So things to look out for. |
| Michelle May: | Absolutely. And it will be really interesting to see what our guest, Christopher Conolly, will have to say about that. So if you’ve got any questions, obviously get in touch for some future episodes. If you’ve got a question regarding buying, selling or anything that has to do with Sydney property, do email us at … Marcus? |
| Marcus Roberts: | Ask, ask@sydneypropertyinsider.com.au. That’s A, S, K at sydneypropertyinsider.com.au. And we’re starting to get some, you know, some really good feedback. So really look to continue that and we’ll start answering questions in the weeks ahead. |
| Michelle May: | I look forward to telling- |
| Marcus Roberts: | Next week and our next episode. |
| Michelle May: | That’s right. |
| Marcus Roberts: | Thanks so much, everyone. And have a great week. |
| Michelle May: | Cheers. |