Buying a property in lockdown – a guide

With national home values rising 13.5% over the past financial year, it’s clear that Australia’s love affair with property isn’t going to let a minor thing like a once in a century pandemic stand in its way. According to buyer’s agent and author Lloyd Edge, the property market in Sydney will continue to thrive despite the two-week lockdown imposed over the nation’s most expensive capital.

But with online auctions and virtual inspections comes a whole new layer of risk, and there are certain things buyers should look out for, he said.

Inspections

Since buyers themselves are not currently allowed to inspect a property in person, many are doing a virtual walkthrough by way of video call. If a reputable buyer’s agent is the one facilitating this, then it’s most likely they will enable the buyer to see the whole property, cracks and all. But if it is the seller’s agent doing the filming, then the buyer must be sure to ask all the right questions.

“One of the risks of not seeing the property physically yourself is that if you are relying on the agent to do it you might miss things because they are not showing you everything,” said Edge. “They may not want to show you any of the bad things about the property.”

He recommended asking to see pictures of the walls and ceilings to determine whether there were any problems such as rising damp. It’s also important to see the external walls in case there are any significant cracks, he said.

“Get them to do a whole walk around of the outside of the property to check if the brickwork is satisfactory,” said Edge.

As always, a pest and building inspection should also be completed before moving forward with a purchase, he added.

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Online auctions

During last year’s lockdowns, Edge said a lot of people participating in online auctions were doing so with greater confidence than they would have when attending in person.

“When people are there, they can be a little bit more intimidated by someone who’s looking more confident,” he said. “They never know whether someone’s got a poker face on and whether they have a large budget - some people can get freaked out by that.

“Online, people can be a bit more relaxed.”

While this comes with benefits, it can also come with risks – namely that of overbidding.

“My advice there is to make sure that you don’t bid outside your budget,” said Lloyd. “That’s where you’ve got to be very careful.”

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If a buyer goes beyond their budget and can’t get enough finance to complete the purchase, they stand to lose their deposit, he said.

Not only should buyers know their budget, they should also have a thorough knowledge of the area they are purchasing in and a good idea of what the property should be worth. These factors combined should help a buyer know when to put their foot on the brakes during a bidding frenzy.

Kate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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