Amy Mylius from Cate Bakos Buyers Advocates, takes us through some areas she sees buyers falter in their due diligence.

Star of Selling Houses Australia, Andrew Winter, is frustrated about the many and varied rules that are applied to buying and selling real estate in Australia and he says they are treating you and I like idiots.

With low interest rates and burgeoning property prices, the result has been that we are borrowing more.  Bessie Hassan sees this as a big problem.

We share a fabulous and inspirational story about a 30 something young person who has come to terms with her bad relationship with money management and turned it around as she is saving a deposit for her first property purchase.  You might be surprised at how Emily Power is doing it.

Even though the property market does move in cycles, so many people choose to ignore the signs and the lessons we can learn from observing what has happened.  Michael Yardney shares some of his ‘quieter moment’ lessons with us.  Things he has learned from his experience of many years of successful investing.

Who would have thought that Brisbane and Hobart would be picked as the potential big improvers this year?  Hear why Simon Pressley from Propertyology is investing in those two areas right now.

Transcripts-

Amy Mylius

Kevin:  I was talking to Amy Mylius recently. Amy is a buyer’s advocate with a very good friend of ours, Cate Bakos, at Cate Bakos Property in Melbourne. We were talking about due diligence. Amy is featured in the latest edition of Australian Property Investor magazine. We recorded a Skype interview, and I wanted to take a particular part of that and just talk to you about it, Amy.

Firstly, welcome to the show, thank you for your time.

Amy:  Thanks for having me.

Kevin:  It’s always a pleasure. We were talking about the mistakes that people make when they attempt to do their own comparable sales, or CMA analysis, which is a very important part of the due diligence process. I wonder if you’d quickly take me through those.

Amy:  Yes, absolutely. What I find is sometimes people make the mistake of not comparing like with like properties, so comparing apples with oranges. They might take a property that they think is going to sell for a similar price to another one but has completely different attributes, such as a townhouse that is on a small piece of land, quite new and shiny, versus a house that is on a larger block that might need a full renovation. Both houses might be selling for the same kind of price in the area but for different reasons, and it’s very hard to extrapolate those reasons based on those sale prices alone.

Also, when they have a look in a suburb, they might compare a property on one side of the suburb to a property on the other side of the suburb that has completely different attributes and demands. It might be two kilometers away from the station rather than walking distance, and it might be a completely different kind of demographic who are looking there, such as families in one part of the suburb versus young professionals in another part.

Not comparing with one sale is really important, as well. We find that buyers sometimes grasp onto one sale that they’ve seen that they think is quite relevant, but we don’t always know the reasons behind that sale price. The property could have sold for a massive price because two buyers got carried away at auction, or it might have sold at a really discounted price because the agent lost their key buyers a day prior to the auction. Unless you know that information, it’s very hard to create a trend just out of one property sale.

Not applying a range is a mistake that people make, as well. It’s very hard to pinpoint an exact sale price of a property to a dollar figure. It’s not a science, and it’s completely based on a lot of different variables, so I always say to people to give yourself a bit of a range and also apply a little bit of a stretch price,