Extreme House Hunting: Research Checklist
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Why I think researching a property is important
Almost a quarter of a century ago, as bright-eyed and bushy tailed (aka extremely naive) first home buyers, my now-husband Jason and I purchased our very first home. It was a three-bedroom, single storey brick house in the leafy western suburbs of Brisbane and it cost just $126,000. After denuding it of its ‘80s grey paint and matching matte tiles, we sold it for a tidy (tiny) profit. And we were hooked.
Last year – around the same time COVID-19 was starting to sweep the world – we sold for the eighth time. Each property taught us more about how to spot a “good” house – good enough to live in for a while, renovate and then sell (yes, that’s a lot of packing boxes). But we have also learned that there is no perfect property. Unless you build from scratch, you are essentially buying someone else’s idea of their perfect home. Knowing which imperfections are important and which to ignore before we buy has meant the difference between selling for a profit and doing in our dough.
The magic formula is actually pretty simple – take the current value of the house and its predicted growth over a certain number of years, and weigh that up against the cost to rectify any shortcomings. Research is the key. Yes, falling in love with a property is important, as, after all, you (may) have to live there. But, there’s also something to be said for knowing a property’s shortcomings and how much they could potentially cost to fix. We think of it as a property pre-nup.
In hindsight, our first home wasn’t such a good buy: It faced Brisbane’s full west (hot) afternoon sun, was not far from the hum of high-tension power lines, and had a cut-and-fill block that turned into our own local Niagara Falls at the mere suggestion of a cloud. If we had followed the rather extreme list of property checks we use now, we would never have even attended the open home.
And I have to warn you – unfortunately, this list is also definitely why we are finding it so hard to find a home to buy right now. The market is nuts in my neck of the woods. Open homes are all-out elbowing-down-the-hall, can’t-wait-to-gazump-you battle fields, with front-door steps piled with enough visitor shoes to rival all of David Jones’ shoe counters in Australia. Recently, there have been reports of people buying houses sight unseen and with no finance clause, nor building inspection. This hurry-at-all-costs-and-buy mentality, in my humble opinion, has the potential to bite people in the hip pocket down the track. The market is so hot in some places that properties with significant defects – which would never have sold in quieter times – have been dumped onto the market and are selling like hotcakes.
Building up a solid profile of a property before you get serious about negotiating price is, in my opinion, a vital financial protection strategy for anyone considering making what is probably the most expensive investment in their lifetime.
Here is a list of some of the property research we conduct before even considering if a home is worthy of taking a mortgage or home loan out on.
Compare First Home Buyer Home Loans with Canstar
The comparison table below displays some of the variable rate home loan products available on Canstar’s database for first home buyers with links to lenders’ websites. The products displayed are based on loan amounts of $350,000, $400,000 and $500,000 at 95% LVR in NSW, available for principal and interest repayments. The results are sorted by comparison rate (lowest to highest), then by provider name (alphabetically). Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loans comparison selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
Before you go to the property
In our experience, you can typically tell if it’s worth the effort of physically seeing the property just by doing a few simple online searches. As house hunters and buyers, if we like what we see, we go deeper. Here are my personal tips you might choose to consider.
1. Real estate ‘for sale’ listing
Don’t just examine the listing on Domain.com.au or realestate.com.au, but also the agent’s own listing on their website. Sometimes there is extra information or photos on the various ‘official’ listings. Examine the map, the photos and the physical description carefully, and cross-reference with the floorplan (as sometimes the photos are shot with wide lenses and can be deceiving). Check for things like the bedroom sizes (usually 3m x 3m is the smallest size of a bedroom, for example); logical placement of rooms, doors and hallways; and that the house suits the way you want to live. Maybe a small kitchen is ok if you’re not keen on cooking, but it could be a dealbreaker for some. Living areas upstairs might be good for the view, but what about carting shopping up the stairs or when you want to have a barbecue by the pool?
Pro tip: One lesson we learned the hard way is to never take the information presented to you by someone selling property at face value. An example of this is when the photos do not match up to the floorplan of a multi-storey property, which could indicate issues with what can be called ‘livable space’. Let’s say that there are photos of four bedrooms in a real estate listing, but the floorplan only shows three bedrooms and a downstairs ‘storage space’. This could indicate that the downstairs area is not of a sufficient ceiling height to be called a living space. Unless you physically raise the house or lower the floor, you may not even be able to renovate it – as we discovered with one purchase. We have also seen situations where bedrooms are called just that when they should not have been.
2. Google the address
It’s amazing what you might find with just a simple search engine search. Sites such as onthehouse.com.au, propertyvalue.com.au and the like can help build a profile of the house. You can usually find out if the property is a rental (and how much it rented for), when it was last up for sale, previous photos (if, for example, it was renovated, or if beautiful floorboards might be lurking under the peach plush pile carpet), and what previous owners may have paid for it. Some sites will also offer a ‘value estimate’. Keep in mind that some of these types of real estate websites may not be primary sources, so take the recommendations with a grain of salt.
3. Google Maps
Take a look in map view to get an idea of the lie of the land; then swap to satellite view and take note of things like the home’s position on the block and where the fences are. You can also typically see variables like where creeks, main roads and powerlines are likely to impact properties. You may even discover things like a suspicious undeveloped strip of land bordering the property and traversing several blocks, which may just turn out to be a future road reserve (true story).
4. Google Street View
Walk the street without leaving the comfort of your couch. Check out how the house looks, and have a (discreet) stickybeak at the neighbours. Are there lots of cars parked in the street, perhaps indicating traffic issues? Where is the sun shining – are there shadows over the house from neighbouring properties? Is there a ‘reduce speed’ or ‘local traffic only’ sign, indicating it might be a commuter ‘rat run’/shortcut? Use Street View by dragging the little yellow figure in the bottom right-hand corner onto the map in your browser or app to check out the surrounding streets too. It’s also possible in some cases to step back in time by clicking the clock icon under the Street View address (usually on the top left-hand side of the screen). This can tell you about any changes made to the property, and the properties around it, even details such as if there are big trucks parked on the street over successive years, indicating a possible source of noise. In the below example, the real estate listing shows only a quaint house, but Google Street View reveals a side driveway with several townhouses in its backyard.