A number of buyers agents suggested NO GO issues to Domain earlier this year, and I have added mine.
There are some things buyers should never compromise on in their scramble to acquire a property. However, if you never compromise on your ‘must haves’, you could end up being left behind as the market advances. The only “ideal” property is probably the one you build yourself!
An external compromising feature will rarely change and the location is one feature that can never be changed so if the property is situated on a busy road, under a flight path, near power lines, a substation or factory, or in flood-affected area, the pool of potential tenants and future buyers is limited.
You may buy cheap, but you will sell cheap too; and such properties can be difficult to sell in a seller’s market, will be even more difficult to sell in a buyer’s market.
Buying on a busy road may be acceptable, but only if you get a bargain. And buyers need to be prepared to sell for a discount at the other end.
At the end of the day, you can improve the house but not the location.
Major structural issues or termites.
It is almost impossible to negotiate on a property with major structural issues or termites. You could never negotiate a substantially low enough purchase price to compensate for these very costly items so it is best just to walk away.
At Strategic Buyers Agents, we insist on building inspections, otherwise we need client signoff that they declined to do so.
Building / Repair Issues
Avoid properties with building issues. These include subsidence, re-plumbing, and asbestos. The cost of removing or repairing these issues can outweigh the bargain nature of the deal when the levy is struck and the invoice needs to be paid. At Strategic we have bought properties that need repair, but only after have negotiating a discount.
Be prepared to compromise on aspect, but never on light. Many buyers are fixated on a north-to-rear aspect, but only about one quarter of all properties have this feature. But some of the brightest homes may not be north-south, but still work, e.g. that may be on hill and have no other properties overshadowing.
Steep blocks and low-light locations
Unusual topography and low-light areas are no-go zones. A dark house in a valley position surrounded by heritage-protected trees can be next to impossible to let light and air flow in, despite all the skylights and damp proofing available.
BUT not all “problems” should put you off
Not every problem property is a lost cause. Most aspects can be overcome, for instance with double glazing, or clever planting to hide poor outlook, and building fences. It all depends what the problems are and on the size of the discount. Resolving the issues without overspending is the name of the game.
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