Despite some well-known headwinds, property markets across Sydney and NSW continue to press higher.
The latest data from CoreLogic is suggesting that values are up 1.8% over the month of August and over 20% for the past 12 months. While there are a range of factors at play here such as record low interest rates, one of the biggest drivers continues to be a lack of quality stock.
CoreLogic has recently stated that there are approximately 29% fewer properties headed to auction across Sydney, than at the same time last year. For sellers, this might be good news, but for buyers, it does add to what is already a very competitive market.
As a result, it’s important for buyers to realise that they need to be proactive in securing a property and one of the best ways to do this is to look at off-market opportunities. Off-market sales take place when a property is sold prior to it ever being listed on one of the major real estate portals.
If you’re a buyer and you know the market well, it is oftentimes in your best interest to reach out to sales agents and get on their list of active buyers. This way, when a property comes to market, you will be able to have a first look at it.
It’s even better if you are able to cultivate a good relationship with some of the leading sales agents in a certain area, as they will know to call you if there is a potential listing coming their way.
To understand why a property might sell in this manner, it’s good to look at the sales process from the perspective of a sales agent.
Normally, a vendor will first make contact with a sales agent to discuss the prospect of selling their property. Once the vendor agrees to proceed with that agent, they must also decide on the best process to use to sell the property. Whether that is putting it to auction, listing it and accepting offers, or even using different types of sales processes.
From there, there will also potentially be a need for the house to be tidied up, which might also include painting or minor renovations. These days many people also choose to style their homes to make them presentable and appealing to potential buyers.
After the home is ready to be presented publicly, the agent will organise photos and start putting a listing together. Finally, after a few weeks at a minimum, the property can be listed for sale and the marketing process begins.
You might be thinking to yourself, that there is quite a lot that goes on between the time the vendor decides to sell and when the property actually makes it onto a real estate portal. And you’re right.
This is exactly the time that a sales agent or vendor might very well be open to accepting an offer on the property. Or in reality, before any of those things occur at all.
There are a few reasons for that. Doing all these things to the property costs money. Painting and small renovations are not cheap and they are also time-consuming to organise.
Styling a home properly costs thousands of dollars as does other marketing that the sales agent will likely want to do as well as the cost of the auctioneer.
For many vendors, a quick and easy sale is preferable to all the hassles that come with opening their home up and getting to that point in the first place. Many vendors have a price they want in their head and if you’re able to meet that price, then they will also be very keen to make a transaction happen.
The other factor that is important to a vendor is certainty. While we’ve already, spoken about the low level of listings, there is still a degree of uncertainty in the air. If a vendor can get their price right now, that might be more preferable to them, than the multiple months and many thousands of dollars that are involved with marketing and auctioning a property.
Clearly, there are a number of reasons for a vendor to at the very least, entertain an early offer on a property.
If you know your market well and if you have taken the time to cultivate good relationships with some of the major sales agents in your area, then there is every chance you’ll be able to secure a property, even if the market is very tight, like we’re seeing at the moment.