How do you buy sight unseen?

Hello Everyone,

I'm wondering if any of you have bought sight unseen and if so what considerations or strategies did you put on doing so?

I myself have technically bought sight unseen however i had my father inspect the property prior to putting an offer in.

I'm considering outer Brisbane Suburbs and want to put discounted offers in the hope of volume offers = 1 success in an under-market IP.

Thoughts??????

QS

 

I usually wear my ninja outfit.

It seems that for you the solution isn't not to see the properties beforehand but to get in control of your emotions. Every time you have feelings become involved, push them aside and do your numbers. A check list might also help, just use your analytical skills and you should find it a bit easier.
Either that or drop $10k+ on a BA.

I don't believe in "under market" as a strategy by the way. They rarely exist and if they do can often be created by ripping someone off that doesn't know the value of their property. I prefer a good price with a good yield.

 

Yes agree, Undermarket is a strong word and aware of the connotations. I guess what i am looking for specifically is a price-point where the yields make sense. Some are already in that place and some are not, however without seeing the property it is hard to gauge the pricepoints in different properties when the listings seem to be very similar.

The other issue is that i am in Sydney and don't intend on inspecting every property that 'mostly' fits into my criteria.

I notice you are from Sydney as well... have you ever bought sight unseen?

 

I think here's the real issue. I've been down to Adelaide three times in the past year and looked at just under 50 properties all up in that time. I ended up buying four of them, so definitely worth the time and money (~$2k) investment for me.
Flights to Brisbane or Coolangatta are cheap and you can get return flights for just over $100 so all up, it might cost you $200 to go there. Worth it if you're looking at a $250,000+ investment?

I have and it's the worst property in my portfolio, but it's still paying for itself.
I would do it again, but only under very special conditions such as having a trusted and experienced person look on my behalf.

 

Yes i have a few times. What helps a lot is to understand the area well and have a clear idea of what you need to buy, for what price with what features. I have used rpdata, worked with agents, pms in the past to help me get an accurate as possible picture of what I'm looking at as well as running the numbers. If I'm still not sure after all that I'll either walk away or take a flight if I think the deal has real potential.

 

Well personally I don't think it's rare to be able to buy bmv,i think probably for most of my deals I was able to buy under value and lock in equity from day .

 

I just purchased unseen in Runcorn, Brisbane. I used to think it was crazy and had no plans of doing it myself but it just kind of happened. How it happened for me:

1. Narrowed down suburbs I wanted to check out from Sydney, looking at all the usuals, transport, infrastructure, schools, distance to CBD, past sales history of suburbs/recent growth - all the usuals.

2. Through the above research targeted about 6-8 suburbs to inspect.

3. Travelled to Brisbane a few times, checked out areas, went to open homes, spoke to locals and agents, put in a few offers and got rejected. Narrowed down target suburbs to about 3-4.

4. Returned to Sydney. Was looking at houses at Runcorn one day on domain and as I refreshed a good value property came on.

5. Checked out google street view, location to train station, shops, main roads, school catchments, flood zones, rp data report for sales comparisons etc.

6. Put in a solid offer above asking price and secured the property that afternoon. If I had've low balled agent would have taken to open house and potential for securing a relatively good deal lost. I believe the agent was from out of area so put on the market under priced.

The way the Brisbane Market is depending on which suburb you purchase you may struggle to find something if you are offering below asking price.

My theory was that purchasing a brick home unseen was minimal risk. I knew it was a good location and good price. Any structural problems would've shown up on the building inspection so thinking logically I really believed it was a minimal risk.

Cheers

 

So basically, you haven't bought sight unseen if you take a flight up?

 

Good point!

your 15 min inspection i not going to pick up the buldings issues its more to check out the neighbours! good summary ol chap

 

Most of my clients that buy unseen spend loads of time researching the area/property from behind their PC - and then have someone on the ground (friend/family/property manager/building inspector) check out the place for them in person.

 

I've been wondering about putting in offers on properties that are not on the market ( potential future development sites ).

A walkthrough for these would be difficult prior to making an offer. Although intent would be for a BA or PM to be the person on the ground.

I guess you could put in an offer subject to satisfactory building and pest.

 

No my point is if you are still unsure after all your DD, research, photos etc then I would go see for myself. Only 1 time I wasn't convinced and took the flight to see out of all the unseens i purchased.

 

@qonyx_sydney ,

• Be familiar with area you are buying In to. Observe auction, sale for few weeks
• Get understanding of better and bad pockets in area by speaking to PM and agents.
• When you find a property that you like, negotiate price and terms
• Have contract subject to finance and satisfactory B & P
• Upon exchange of contract, get B & P sorted
• Google earth location,etc
• Get couple of PM to give you rental apprisal and insisit them to visit property
• Check amenities, school catchments, transport,etc
• If all okay, go ahead.

Milestone to pull out of deal,

• Poor B & P
• Lower rent figure by PM then market.
• PM feedback of visual of property and location.

We bought most properties using abvoe and bit additional due diligence.

I hope this helps you!

 

Be aware that agents are likely going to prefer someone who has attended an open house over someone who hasn't seen the house.
If you do your research, you might be able to sound like a serious buyer on the phone, but don't be surprised if they don't give you the time of day, especially if there are plenty of buyers.

 

HI azazel,

That's where sending the contract back with a check signed shows them you mean business. It hasn't worked every time, but it does work. It can be very enticing for a vendor to be told by their agent that they have in their possession a signed check. It can also have a certain impact on their emotional stance. And the agent suddenly sees their commission in front of their eyes.

Personally, i always try to sell not only the vendor on my proposal but the agent too. Then the agents will sell my offer to the vendor. Its human nature.

 

It's a good idea, I haven't tried it myself, hand delivering the contract with a cheque to the real estate office. But what about interstate, do you send a .jpg or a photocopy? Or the actual cheque via courier?

 

When you say 'negotiate price and terms', what do you mean? Obviously price is clear. But terms? What possible terms can there be? Length of settlement? What else?

 

Registered overnight post. I also send a picture of the check to the agents email.

 

Excellent last point. In theory the agent is working for the vendor. But depending on how you negotiate you can make the agent work for you too.

 

Hmf, well there you go. I will have to take the bank tellers advice on Monday and finally get me a cheque book.