Once properties have been selected and agreed against the required personal criteria, the investor is fully prepared and ready for a physical inspection of specific properties. Inspections are usually conducted in the company of a licensed estate agent. It is preferable that the owner/occupier is not present as this will enable the investor to ask questions without embarrassment and allow the inspection to be conducted without pressure.
Remember, it is not necessary for the buyer to carry out a physical inspection personally. In many cases this may simply allow an emotional bent to the purchase decision and this can be inappropriate. Rarely is a property buyer also qualified to uncover any of the more important defects a property may have and relying on a physical inspection to do so may simply result in the investor buying or not buying, based on how they personally feel about a property’s look and feel.
Remember, your client is buying to satisfy a demand which you have confirmed by doing the correct research and looking at a property cannot increase, or decrease an individual property’s suitability as an investment.
However, an inspection of some kind, by a licensed inspector first and later by someone who may easily be able to access the property (such as a local property manager), is prudent.
This inspection provides the opportunity to establish the chattels that will stay with the investment when sold. Chattels may include electrical light fittings, curtains, blinds, floor coverings, ovens, stoves, hot water service and heating appliances. Enquiries need to be made as to whether all appliances are in working order and if purchase proceeds, a request made that at settlement all appliances are still working. This request should form part of the special conditions of sale. The inspection also offers the opportunity to enquire about carports, garages and/or car parking space. The boundaries of the property as shown on a certificate of title should also be confirmed.
Ultimately, the property must be appealing to the investor and potential tenant’s needs, as well as those of future likely buyers. Asking the right questions and identifying growth drivers, before property selection is even made can ascertain this.
At the end of this fifth consultation, the client should be able to make a careful, considered judgment about a specific property or service and about their investment future. Given the time taken so far and the care taken to relate the investment decision to the client’s situation, goals and objectives, a high level of trust and confidence in you should have been established and the client should be comfortable with the property or service recommendation.
If the client is comfortable with the recommendation, you should ask them to sign an Authority to Proceed. This must be done prior to any purchase arrangements being made.