Across Australia and in Sydney in particular, property markets are back at boom-time levels.
We’re consistently seeing auction clearance rates above 80%, a lack of quality listings and buyers competing to try and secure a property.
Clearly, we’re in a seller’s market and that makes things tough for buyers. However, there are a number of things buyers can do to improve their odds of not only securing a property but buying well.
Have Your Finance in Place!
When markets favour the seller, you need to be ready to act quickly as a buyer. The first thing that you will need to have in place is your pre-approval from a lender.
Generally speaking, you should always talk to a mortgage broker well in advance even when markets are slow. It gives you a very clear idea of how much you can spend and also makes your offer stronger. It’s also vital to have that conditional approval from a lender if you are looking to buy at auction, so you don’t get caught up in the hype and overspend.
Increase Your Options!
While real estate portals are a good source of properties, when markets are hot buyers need to expand their thinking.
We’ve seen a big increase in properties selling off-market in the past 12 months so it’s important to try and build relationships with agents in suburbs you’re interested in.
If you’re confident, you can even look to approach homeowners directly or through the mail or with letter drops.
Do Your Research!
In a hot market, you need to keep your finger on the pulse and know a properties real value. A great source of information is recent sales data which you can now access on most real estate portals. That should give you a good idea of what a comparable property is worth.
However, it is also well worth talking to local agents as well. Agents are on the front line and when markets are hot prices can jump quickly. While an agent might not be the person to talk to about one of their own listings, speaking to a variety of local agents about what is happening in a particular suburb is a very valuable exercise and a great way to build relationships.
Work with a Buyers Agent!
One of the major reasons to look to use a buyers agent is that they have a large network of agents and potential vendors already in place.
They are able to help identify properties that are coming to the market before the public will ever hear about them and in a strong market this is very valuable.
Buyers agents are also able to contact owners directly and have creative methods in place to source properties such as looking at rental properties that owners are looking to offload.
As a buyer you want to have as many options as possible and working with a buyers agent is a great way to improve your odds of success.
Have Realistic Expectations!
One of the things that hold many people back is that they have their expectations out of sync.
If you have a small budget, buying a premium property is not all that realistic. It’s far better to get into the market and then upgrade when the time comes than to miss out. Many property experts, including CoreLogic, are expecting to see house prices increase by 20% over the next 12 months.
If you’re not realistic about what you can get into for your budget, you risk pricing yourself out of the market. It’s unlikely that a vendor is going to come back to your price, when they have multiple offers on the table.
Trust Your Decision!
If you make the decision to actively pursue a particular property, don’t lose the opportunity to secure it over a few thousand dollars.
The latest data from CoreLogic, suggests that house prices are rising at over 5% each quarter. For a million-dollar property, that’s a $50,000 increase in price in just a few months. If you’re haggling over a few thousand dollars, you risk losing a lot more simply because the market is moving so fast.
Similarly, if you’ve been looking for a property for two or three months, you must also be prepared to adjust your expectations. If house prices have risen by $50,000 in the last month or two, you need to be decisive and adjust your offers accordingly. Things have likely moved sharply since you began your search.