Ep 1. Let’s Start with the Basics
This episode is an introduction to Michelle’s career as a buyer’s agent, and the ‘Buy Your Side’ property podcast series. This episode will touch on how to get prepared when starting to look for properties, as well as where and what to look for.
Here’s what you’ll learn from today’s episode:
Michelle’s history and experience as a Buyer’s Agent.
Where to look for a property online.
What to look for in a property.
Pre-approvals.
Short-listing potential properties.
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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This podcast has been recorded and edited by Cobalt Soundscaping
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.
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Hi and welcome to Buy Your Side, the property buying podcast for all those buyers out there who might think they need a helping hand, and even perhaps for those who don't. My aim is to help you make better choices and better property buying decisions.
Now to get started, my name is Michelle May. I am the principal of Michelle May Buyer's Agents here in Sydney, Australia. I have been a buyer's agent since 2008 and prior to that I used to flip properties in the UK. It actually started as a bit of a hobby. I had a normal job. I bought my first place at the age of 22, renovated it and sold it within a year and made a fair bit of money. So I realised that maybe I was on to something. So for the next 12 years I proceeded to do that, and when I came to Australia in 2007, I decided that I really wanted to help buyers in a more professional capacity and knocked on the president of the Buyer's Association at the time and asked him for a job. So many years later, here I am, and I'm hoping to impart a little bit of property buying wisdom for all those listeners out there today.
So that's enough about me, let's get started! So you're in the market to buy a property, whether it's your first home, your second home, you're downsizing, you're investing. It doesn't really matter. There's so much to property buying it's almost a secret language that a lot of people don't really know the ins and outs about.
So let's start with the basics. Before you start shopping and visiting all those beautiful real estate portals like Domain and realestate.com.au, there's a few things really that you need to get sorted first. Ideally, you have the professionals on your side. So whether you're thinking about using someone like me, like a buyer's agent, you really need to start with your pre-approval first. So what does it actually mean to have a pre-approval, otherwise known as a conditional approval? It means that you have gone to a bank or a broker and they have, in principle, agreed to lend you a certain amount of money towards a property purchase. Now, it hasn't proceeded to the full and final approval, but it allows you to sort of get an idea of the maximum amount of dollars available to you so you can narrow down your search and bid with confidence.
So I always say, you know, you don't go shopping without your wallet, it's highly frustrating and, you know, demoralising. Although my husband loves for me to go shopping without my wallet when it comes to property buying, you're better off having that done. First off, particularly because some banks can get very busy and it can take a fair amount of time to have that all sorted. I would always recommend going to a broker because a good broker will have access to a multitude of different lenders in the market out there. So they can give you different options and better rates. It's like going into a Volkswagen dealer. You know, they're obviously only going to recommend you their line of cars. They're never going to say, "hey, psst, you really should be going to Skoda because they give you much better value for money". You know, it doesn't work like that. It's the same with going to a bank.
So a broker will have lots of different choices available to you. So one thing to remember with a preapproval and something some people don't really realize this, this pre-approval is linked to you as an individual or as a couple. They may say, OK, Jess and James, this is your income, these are your expenses, so therefore, we will lend you X amount of money. This is not linked to the property that you are thinking about buying. So if you, for example, have a preapproval of a million dollars, but then you go and buy an apartment and put a million dollars on the contract, but then the bank can still come in and do a valuation and then they can turn around and say, "well, actually, it's wonderful that you've put a million dollars on the contract, but this apartment is only worth seven hundred thousand". So therefore, that shortfall in the valuation, that three hundred thousand dollars, you will have to find yourself. So make sure that you obviously do your numbers when it comes to a property, because once you've found the property and you've signed on the dotted line, you've exchanged contracts. That's when the bank comes in and makes that pre-approval, that conditional pre-approval. A final approval, an unconditional approval. So that's the one thing that you need to get started.
So you've got that sorted. Excellent. Now, what do you do next? Now, I know that in this market at the moment, price guides are somewhat unreliable, let's put it that way. Sometimes that's due to underquoting. But a lot of the time it's also because of the heat in the market. So buyers are actually outbidding each other because they seem to have very deep pockets. Perhaps they have help from the bank of mum and dad. They may have had a lot of savings from Covid or maybe, you know, a lucky break at work. So it's very important to sort of almost put price guides to one side and a way to do that is to go on those real estate portals that we all know, realestate.com.au, Domain, Homely, there's all these other ones available right now. And rather than putting in your requirements of what you think you need, say: two bedrooms, one bathroom, one car. You just put in your maximum pre-approval or what you are prepared to spend in the sold section of that website, and then you see what comes up. Now, then hopefully you'll see a trend in particular suburbs, so say you're buying in the inner west of Sydney and you've got you want to live in Newtown, and you're looking at Erskineville and places like that. So you can put in those suburbs, you can put in your max and look what comes back. So, again, say your pre-approval is for a million dollars, you know, you might see a running theme that it's mostly two bedroom apartments, for example, with or without parking.
So then you know that, OK, realistically, when I then start looking at shortlisting properties and inspecting properties, realistically you should be looking at two bed apartments only. So even if you put in the parameters and a price guide comes in at, say, six hundred for a three bedroom house, you do know that that's actually going to be way out of line, and the actual sales result is not going to fall under a million dollars because part of this process is to really try and cut through that wishful thinking that is happening a lot in this market, and any market actually. I think it's human nature for people to always want more than they can have. You know, ultimately, that is how we got this far today. If we had no aspirations to always want bigger and better, we'd probably be still sitting in a cave, in a loincloth. And it doesn't really matter what kind of budget you have. The buyers that we work with, whether it's miniscule first home buyers budgets or, you know, multi million dollars, every buyer always wants a little bit more than they can afford. So by using this strategy, by going into the sold section, you'll find that you can start realistically, and do be aware that obviously in a rising market, prices come up very rapidly, particularly at the moment. You know, prices have risen over 100000 dollars just in one month, the median house price in Sydney, for example. And that seems to be the trend worldwide. So you've got to look at comparable sales that are very recent, maybe maximum two months old, and then you have to add a percentage to that as well. So I think look at it analytically, you know, maybe start a spreadsheet. I love a good spreadsheet because, you know, every time your mind wanders, oh, maybe maybe this agent, maybe he's right. Maybe nobody else knows what this is worth. You can go back to your spreadsheets and go, "no, no, let's go back to what can I actually afford".
So part of shortlisting your properties as well you've got to think about your ideal wish list and think about how realistic that is going to be when you're looking at real property, Now, there's no such thing as the perfect property, no matter how much money you've got. So there will be some kind of compromise. But look at it from a practical perspective. You know, do you really need that extra bathroom? Do you really need that extra car space, for example? Or is it more important to be in a good location? Now, from my perspective, in order to help you buy better, the one thing you cannot change about a property is its location. So for me, as a buyer's agent, I would say that a quality street, a quality building (if you're buying an apartment) is paramount. And that is not something you should be compromising on because it will have long term effects on your capital growth potential. Now, capital growth is, of course, the rise in prices over time in the median of a particular suburb in a particular type of property. So if you are compromising by being on a main road, those are the type of properties that will not perform that well in the future. So if you can, aim to have a prime location first and foremost and then look at, again, in those sold sections, which properties fell within your price bracket that were not on main roads or on yellow roads, as I like to call them. So I'll tell you something that I always say to my buyers. You shouldn't eat yellow snow, don't eat yellow snow, don't buy on yellow roads. Now, I hope you'll never forget that because the yellow roads mean that they have higher volumes of traffic. They usually have a bus route and obviously are very busy. So your enjoyment of living will be impaired there as well.
So first and foremost, think about location and then look at other things that are important to you. So I imagine internal light would be important to you. Good height in ceilings would be important to you. Privacy would be important, I imagine. And what about other things like do you really need a car space or could you forsake the car space if you were in an area that is close to public transport? And what kind of public transport is it? Is it a tram or a tube or a light rail or is it a train, bus only? So think about that. How important is a car space or a garage or a secure parking for you, because that adds a significant cost to your purchase. And so if you don't have that, then whatever money, the value of that space, can be used to your internal space. But of course, it's got to be practical to you. So if you have to travel great distances to get to work and you're really reliant on your car, that is obviously something that is essential to you. So it goes higher up your essential needs list, your deal breakers if you don't have one. The other thing is, if you're looking in an apartment, for example, you know, it's nice to have a balcony, because having a balcony, however minuscule, by being able to open up your doors or your windows, it sort of extends your living space. But the location of that balcony is important as well, because having a balcony off your bedroom is not going to be as practical or as easily used as one off your living space for example. So think about these practicalities when you're making your wish lists, you know, if you are, for example, working with a tight budget in an area that you want to be in, would you consider doing renovations? Because by doing renovations, however big or small, it will open up the supply of properties that are for sale. So by not wanting to do any renovations, you're buying a finished product and quite often the vendors will want a premium for that. So opening yourself up to renovations again, how high and up or down your wish list is that? Perhaps you want to do renovations because you know, you have a particular style that you really want to impart once you have your own space.
So have that wish list, write it out, but be willing to sort of move things up and down the list as you come across new properties that you are inspecting. So when you've made your list, you go through on Saturdays, it's great because, you know, it's exciting, but it's also very busy and you don't get a lot of time to do it. So be mindful that you're probably going to be going through the properties with a million other people. With kids and dogs, sometimes even as well. So you're not going to be able to see the property in its full light, particularly because a lot of properties, of course, are now highly styled. So instead of really seeing the property for what it is, you might be blinded by the cockatoo picture on the wall or the million cushions on the tiny double bed with all this style to the smallest double bed possible. It's never a king size because, of course, that makes the room look so much smaller.
So once you've seen properties that you really like, don't go rushing in just yet, but make sure that you have a second inspection, ideally privately. So did you know that most agents and most vendors are quite happy to oblige you with a private inspection? This will allow you for, you know, 15-20 minutes on your own, perhaps only a handful of other people, but with a lot more space to just soak it in, have a good look around and look at the property more critically. It's really important that those rose-tinted glasses come off and you start to see the property for what it really is. You know, ideally, you do it during the daytime as well. So does it have enough internal light? Like I said before, it's highly, highly critical, (particularly in an apartment, of course), where you can't change anything about that. In a house, you can do some things about it. But in an apartment you're stuck with the aspect in the internal light as it is. Have a look at the bed. Is your bed going to fit in there? What's storage like? What's the street like as well? Like before you go in and after you come out, is it really busy? It may be a rat run for the local parents to pick up their kids. Is there a flight path right over the house, all these things that there's know where you would have noticed them on your first inspection? So once you've done that, you can decide then to take the next step. So you found the place that you really love, you've done that a second inspection, and I think now it's time to start doing your due diligence. But I think that's enough for this episode.
I think I hopefully got your mind thinking about all those things you need to get sorted before you start shopping. Do tune in for the next episodes where I'll take you through the next steps on how to get yourself ready to buy the property that you want. Now, this podcast is aimed at buyers, and I really welcome any people who are listening to get in contact with me. Drop me an email at: hello@buyyourside.com.au today you ask me any questions you want to know and maybe if you'd like to come into the studio sometime, we can discuss your property search in further detail and hopefully we can help you make better property buying decisions. Thank you so much for listening and I look forward to talking to you next time.