CAUTION URGED FOR EOI BUYING

April , 2006

Buyers considering purchasing a property by expression of interest are being cautioned not to get caught up in the hype of the increasingly popular sales method and pay too much.

Property Wizards' Director Trevor Dunkley said expression of interest selling, which was becoming more common in the residential sector, could be a danger area for investors.

"Often sellers embrace the expression of interest process in times of heavy competition and housing shortages," said Mr Dunkley.

"The marketing campaigns and silent bidding wars that are hallmarks of this sales method can cause problems for investors who get emotionally attached to a property.

"Similar to what may happen at auction, many buyers can get caught up in the hype and feel intense pressure to offer more than they can afford or more than the property is worth for fear that they'll miss out."

Mr Dunkley said it was critical for investors gather as much information as possible to ensure they knew the correct market value of the property.

"Finding comparative sales evidence and knowing exactly what alternatives are in the marketplace are of critical importance," he said

"Once buyers work out the true market worth of the property, they should then make their offer, secure in the knowledge that if they lose it to another buyer, the 'winning' buyer has paid more than the property is worth.

"It is all too easy in this market to lose sight of a property's true value and end up getting hit in the hip pocket, and paying too much can quickly turn a great investment into a dud."

Mr Dunkley said for unprepared purchasers, the potential pitfalls of buying through an expression of interest process were greater when sellers did not set a minimum asking price or when buyers had missed a few properties and wanted to win at all costs.

For more information, please contact
Mr Trevor Dunkley
Director
Property Wizards
trevor@propertywizards.com.au
Tel: (08) 9381 7450