The industry research is clear cut – prices are rising consistently at 0.7% a month, and there are approximately 20% fewer properties on the market this spring than the five-year average for this time of year.
That’s tough news for buyers.
While we’ve experienced three interest rate cuts since February – and all the major banks predict a fourth before the end of the year – finding a suitable property to purchase has become challenging.
Nobody wants to declare that we’ve transitioned in the last eight months from a buyer to a seller’s market, but consistent 70%+ auction clearance rates suggest momentum is swinging towards the seller.
This makes the market a challenge for first-time buyers and upsizers.
Many upsizers are now looking to buy first to ensure they transact at the lowest possible price while giving themselves an extra couple of months to sell for the highest possible price.
Here are essential 10 tips for buyers:
Get your finances in order – This is the most critical step. In a fast-moving market, sellers and agents favour buyers who are ready to act. Get a loan pre-approval so you know your borrowing capacity.
Define your needs – You may not find a home that ticks every box. Create a realistic list of non-negotiable “must-haves”, such as the number of bedrooms or a location near a school. However, be ready to compromise on things that are not so important to you, such as cosmetic finishes or a specific floor plan.
Don’t delay – Currently, most properties sell within 30 days. When you find a suitable home, be prepared to make an offer promptly. Hesitating could mean missing out, as other buyers are likely to be ready to bid. This same focused approach holds true during auctions. Be decisive.
Keep it simple – An offer with few conditions will always be more appealing to a seller. Work with the vendor to agree on a mutually acceptable settlement period, especially if they now have to find their next home.
Be diligent but efficient – Never skip essential checks, such as building and pest inspections. Have a preferred contractor lined up and ready to work for you. If you get these inspections completed quickly, you can use them during the negotiation phase of the deal, or before the auction.
Off-market opportunities – Not all properties are listed publicly. Network with local real estate agents so they know what you’re looking for. Some properties are sold to buyers who are on the agent’s database. This avoids the seller spending at least $10,000 on marketing expenses. Our agents will be happy to talk to you about this.
Seller’s motivation – Knowledge is power, as they say. So, ask about the seller’s situation and why they are selling. If they have bought and need a quick sale, this can give you an advantage in a negotiation.
Perfect is not necessary – Don’t let perfect get in the way of great. Sellers are always advised to prepare their apartment or house for sale to maximise the value. However, some properties still require a little TLC. In these situations, you can negotiate a more competitive price. Down the track, you can start to improve the home and add to its value.
Hire a professional: Finding a suitable property can take time and become stressful, especially if you have already sold a property and you’re looking to either upgrade or downsize. If you feel a little overwhelmed, a buyer’s agent can make life easier. They work exclusively for you, have access to off-market listings and will provide expert negotiation skills. They do charge a commission fee.