The spring sales season is just around the corner and buyers are likely to face one of the most competitive periods since the post-Covid property boom.
We’re seeing the early signs of a competitive sellers market with recent auction results that are consistently delivering clearance rates of more than 70% every weekend.
And just because 30% of properties are passed in doesn’t mean they don’t sell shortly afterwards. Anecdotal evidence suggests agents are achieving high success rates when closing deals with bidders after auctions.
One reason is the shortage of homes for sale – currently the number of properties on the market is 19% lower than the five-year average.
Industry researcher Cotality (formerly CoreLogic) reports values are continuing to climb by 0.6% a month. The most recent quarterly rise in the national property price was 1.8% to July 31.
Buyers need to think carefully this spring if they are to win a property in this increasingly competitive environment.
Speed and certainty are paramount. A pre-approved loan is essential to get a seat at the table. This makes your offer attractive to a vendor if you’re buying through private treaty or making a pre-auction bid.
At auction, a preapproved loan is non-negotiable as all bids are unconditional. Once the hammer falls in your favour, you’re committed.
Be aware that hesitation can cost you the property. If you find a home you love and have done all your due diligence, make a strong, decisive move.
This might mean making an attractive pre-auction offer to take the property off the market.
If you are in a private treaty negotiation, being the first person to put in a solid offer, along with a signed contract and deposit, can often secure the property before other buyers have a chance to react.
Here are some more tips for buyers in today’s market:
Secure your finances – Before beginning your property search, secure that pre-approved loan. It gives you a budget and also demonstrates to sellers and agents that you’re serious.
Do your research – Become an expert on your target suburbs. Track recent sales prices for comparable properties to understand what constitutes a fair price.
Stick to your budget – In a rising market, it’s easy to get swept up in the emotion of a bidding war. Set a maximum limit for a property and do not exceed it. Over-extending yourself can lead to financial strain down the line.
Be auction-ready – Auctions are a key component of the market. Make sure you know how they work. Attend several auctions as a spectator to observe bidding strategies and the pace of the sale. This will help you feel more confident when it’s your turn.
Due diligence – Don’t make an offer without having commissioned a building and pest inspection. A smart seller will offer their own to you, but you should organise your own. Also, hire a conveyancer or solicitor to review the contract. There is no cooling-off period at an auction, so all your checks must be completed before bidding begins.
Act swiftly – In a fast-moving market, properties can sell quickly. If you find a home that ticks all your boxes, be decisive. This could mean putting in a pre-auction offer or being ready to bid on the day of the auction.
Hot competition – Accept that multiple offers may be made for your target property. If you miss out, learn from the experience, refine your strategy and maintain a positive attitude. The right home is out there, and with a methodical approach, you will find it.