Tips for buying in a rising market
It can be difficult to buy in a rising property market. To help you succeed here’s our 4 Tips for Buying in a Rising Market.
Auction clearance rates to date in 2021 have been consistently higher than we’ve seen in our 22 years as Buyers Agents.
Buyers are paying well above most agents pricing estimates and records are being broken each week.
It can be daunting attempting to buy into a rising market. Time is of the essence though and each week you hold off or are unsuccessful ends up costing money, impacts your desired property criteria or both!
1. Know your market
This is number one for a reason. Why? You need to know your market intimately in order to be able to take advantage of any opportunities and also to know when to step away..
In the months before you are ready to buy:
- get to know your suburb(s) of interest by visiting as many open homes as possible. Talk to the agents and ask them for their price guides
- follow up by attending the auctions of as many these properties as you can
- determine the level of interest by seeing how many bidders there are. Look for buyers that are both actively bidding and also for those who have registered but have been inactive and haven’t raised their hand (you can look for bidders cards in the hands of the crowd). Take note of how intense the bidding is and the eventual sale price. Compare this to the agents price guide. Getting comfortable with the auction process will also help you feel less scared and more comfortable when it comes to having to bid yourself at auction
- subscribe to realestate.com.au and domain.com.au to receive the weekly auction results and call agents for the results that aren’t published. Also don’t forget to look at the “sold” tabs on these real estate portals. There is a wealth of information there.
2. Be ready to go
Make sure you are organised! In a hot market it can be important to act quickly and if you’re still working out the finer details you will find yourself the underdog.
- ensure you have your your finance approved and you know what your limit is and remember to take into account any renovating costs. Any offers you make will be a lot more attractive to vendors if they are not subject to any conditions (such as your finance approval)
- engage your conveyancer/solicitor well in advance and establish the processes beforehand to enable contract reviews and resolving of potential contract issues to be completed quickly
3. Make an offer
Don’t be afraid to make an offer before the auction.
Make your offer as uncomplicated as you possibly can. Don’t request unnecessary contract changes and do ask the agent if there is anything that would make your offer more attractive to the vendor. This could be something like a preferred settlement date. If it suits your circumstances then include this in your negotiation. Your aim is for a win-win.
When making an offer, your knowledge of the market is as vital as knowing your limit.
Don’t make silly low offers as this will just put the agent offside. Start a little lower than you estimate the property will reasonably sell for on auction day and give yourself room to negotiate upwards to your desired end point.
Remember in a rising market it is extremely rare to buy at a bargain price. If you want in, then you need to be prepared to pay a fair market price.
4. Be nice to the agent
And finally… be nice to the agent! An agent will be far more likely to want to engage with a buyer who is pleasant to deal with.
Don’t play games and definitely let the agent know if you are interested in the property. The agent may need to call other interested parties if an attractive offer has been made by another buyer. If you’ve told him/her that you’re not interested, then you are likely to miss out on the opportunity to compete.