First Time

by Gina Kantzas and Mal James

Saturday, April 24th, 2021

First time for Gaby and Sam

Buy

Now is a perfect time to buy well

Be it your first home, your next home or your last home

It is simple, but seemingly not easy.

Time

In the next 5 minutes, you will read about the 5 keys to buying well in any market. 5 keys that will set your family up for the next 5, 10, however many years.

Keys

In order to explain the keys, let us tell you a story.

First time - first time

This is a story of Gaby and Sam – that’s them at the top of this article.

Sam is 30, I first saw him when he was born, his parents Doug and Kate are best friends of mine.

Sam rang me at 3.30pm on a Friday afternoon in March and ask for some bidding tips for an auction he and Gaby were going to the following day, in Edithvale.

I said my best bidding tip is what happens on auction day is maybe 5% of what determines whether you will buy the property or not Sam. I added that it wasn’t about most money……. Kerry Packer won’t be bidding against you.

Silence……..

So Sam how are your parents?

“Good” then silence……………..

Sam do you want my help?

“Yes please”

Well then – as in your engineering profession, outcomes are a result of 95% preparation and 5% perspiration. It doesn’t matter how well you dig the tunnel, if there’s no plan, no consideration of direction, no desire or clear commitment to complete, then the job is not done or not done well.

Can I ask you are question Sam……..do you really, really want to buy this home?

“Yes and so does Gaby…… we have been looking for a year and this is the first one that ticks all our boxes.”

It’s nearly 4.00pm so you had better come and pick me up, take me to Edithvale, you’re buying pizza tonight and what time is tomorrow’s auction?

“1.30pm”

Let me make some calls, whilst you are driving. Have you got bank approval?……”Yes”

At this point, Gaby and Sam had a plan that would have seen them come fourth of the four bidders at 1.30pm the following day.

Timeline 4.30 to 6.30pm: with Sam at Edithvale, we did 3 key things together. The most important was explaining a volcano and why he would not buy 5 Ivan Ave with his current mindset.

7.00 to 9.00pm: It was good home made pizza…….Gaby and I and Sam and the family all talked. The advice was simple: They could buy tomorrow……it was almost entirely in their hands………..but at this stage they had no chance of being the buyer, unless they changed three things.

10.00am Saturday: Call to Sam’s Dad – Doug was at the Barber. It was short.

12 noon: Coffee with Sam and Gaby and discussion. I now believed we were the buyer.

1.45pm: 4 bidders and bought at $1.285m against an agent quote of $1.15m. Sam and Gaby were the successful purchasers.

In the previous 24 hours they did not get any more money, they did not require any parental $ help, but it was there. They were not exceptionally lucky.

They were just smart, very smart.

Sam and Gaby made the difference……not me.

They bought first time for the first time.

What happens @ $1m is the same @ $5m

What Gaby and Sam did would be recommend if it was a $4million home or a $10million home. 5 Ivan Ave Edithvale is and will be a great home, a great investment and ………it has brilliant PPP’s.

I will let Gaby and Sam explain it – it’s unedited and their words to the 4 questions asked.

Hi Mal,

Please see attached photos and see below responses to the questions you sent through – happy to chop and change as required. Let us know what you think. Note. photos of Gaby and I are from our trip to the US in 2019.

How you felt about the home at the start of the week

At the start of the week we felt like we really wanted to buy this house. We had been looking at houses for over a year but this was the first one that ticked all of our boxes. It was a small, un-renovated house with a big backyard and was also close to the beach. We were excited by the opportunity to make it our own. We had also recently received pre-approval from the bank so we were ready to buy (or so we thought…). We felt quite anxious and unsure about the thought of bidding for the home at auction and deliberated a lot in the week leading up, about how much we were prepared to pay for the home.

How you felt differently after our talks before auction – not about Mal – your feelings

After our conversation with Mal we realised how unprepared we were to buy this home – it was a real eye opener and quite overwhelming. While we liked the house, we didn’t know much about the neighbourhood or the previous property sales in the area. It was also clear that we hadn’t put enough thought into our strategy or how to approach the auction the following day. After our discussion, we felt more prepared as we now had a plan. We went from thinking we would casually make our first bid on a house and see how it goes, to feeling confident that we were in a very strong position to buy this home! Although still very nervous about the auction, there was definitely an excitement and confidence that we didn’t have earlier in the week. We felt much more prepared going into the auction and confident that this was good property to buy.

How you felt before the auction

On the morning of the auction we were both very nervous and I think our families were too! There were many questions and many scenarios running through our heads. How many people will be bidding? What if it goes over our budget and we miss out? What if we actually buy this home today? We met up with Mal beforehand to confirm the strategy going into the auction and talk through how it might play out. Knowing that we had someone to do the bidding for us was a huge weight off our shoulders (and our families).

How you felt afterwards

The whole auction experience was surreal. When the auctioneer’s hand hit the paper and we heard the words “SOLD!” we were in shock and immediately felt very emotional. We were crowded by real estate agents, family and locals who attended the auction who all congratulated us. Signing the papers we were still very much in a daze. Fortunately we had Mal there to guide us through and check everything was in order. It was great to meet the owner who had lived in the property for 64 years and her family. We felt like we had made the right choice and had the support from Mal and our families to confirm this. After the initial shock we have been getting very excited for settlement day and getting together for a working bee!

Sorry to repeat

Now is a perfect time to buy well

Be it your first home, your next home or your last home

It is simple, but seemingly not easy.

5 keys to buying well

3A’s – these are the 3 Actions you MUST carry out to buy well first time.

They are simple but seemingly not easy

Action 1: You must believe in the 3P’s

Action 2: You must start with choosing the right 3M’s

Action 3: You must finish through the 3C’s

3M’s – these are the 3 People you MUST involve

Mentor: I’m sorry but you can’t buy good property on your own. I have bought 1000’s of homes and every decision I make still goes through a peer review system within our company and I have found that I am not right all the time (despite my self belief). If Uncle Ben doesn’t know a good investment property from a bad ruckman, then he is not your best choice as a property mentor. If I am going for open heart surgery I want to know the doctor is a regular at the caper AND that his/her patients actually pull through. Just because Aunt Mary tells you no no no and don’t don’t don’t – because she never did that – doesn’t mean Aunt Mary is giving you good advice – especially when you don’t like Aunt Mary that much anyway.

Managers (good advocate): How many people have read all the books, have their bank loan in place but have a dinner party story that goes like this… Those agents lied to me again on the quote and I just missed out for the fifth time. Ok but why would you pay an advocate in this market? Well my friend what is the definition of insanity. Well my friend, if you are missing out all the time, it won’t cost you anything to engage an advocate and miss again (ha ha). Well my friend, you are still looking for a home and the market has gone up 10 to 15% since I bought with Mal in October 2020 – he cost me 1.1%. Or another answer………my friend I paid Mal 1.1% because we didn’t buy a flat, we didn’t buy an off the plan, we didn’t buy a dog of a home……..and our home is now worth double. And finally, my friend it’s not just the money …………the advocate SAID NO to 3 homes we might have accidentally bought and got the deal done on this one and we love it.

Mortgage broker: 100% True Story: I (Mal) own a home and an investment property over $4million. I have an LVR less than 30%. I have earnt over $300,000 per annum for the last decade of my life. I have been in this company for 20 years. I have no criminal record and I have never missed a payment in 40 years. I have no other debt. I bank with CBA and have most of my life. I think my bank manager is a nice person and I pay 2.6% on my mortgage.

I cannot get a loan for $500,000 to help my kids buy a home.

I do not fit their criteria. I tried for two years.

I’ve gone to a mortgage broker.

Unless you are a perfect box for the bank they cannot help you AND even if they can….. they take forever to do so. Found a home and now you want finance from a bank – forget it – the home will be long sold before you even get your call returned.

Get an ethical mortgage broker.

3C’s – These are the only the questions you need to ask to commit well

Commit to Clarity – ask the question over and over again what do I really, really want? (Outcomes)

Commit to Due Diligence and Research – ask the question is this it – is this my great home? Get a building inspector, a solicitor and …… pay them to help you.

Commit to How – Ask the question what have I got to do to buy it? No, not want I want to do, what do I have to do?

The shortened sub question is, how much risk for how much money

3Ps – these are the 3P’s you must buy (if you are starting out – it can be different as you get older)

Position: Near a train – not because you use public transport.

Property: Good land content – not because a mancave or kitchen isn’t desirable.

Price: Near Median for area type – not because you can’t afford more.

You are doing all this for Big O – 3 of them

Outcome – Emotional – for you and your family to feel safe, to feel good, to feel secure

Outcome – Physical – to be near rather than far from whatever is important to your family

Outcome – Financial – To have choices now and in the future, because of growth.