2020 was a year of uncertainty and there were many people who anticipated property prices to decline as a result of increased unemployment and financial strain on homeowners.
As buyers patiently waited for this to occur the property market in Australia (and in regional areas especially) started to surge and many have now found themselves priced out of areas they were originally searching. As at the beginning of March 2021 property prices in Hobart were up 4.8% over the last 3 months and 8.7% over the last year.
Buyers who are now in the market are used to line ups at open homes, being in competition with dozens of other people and properties selling within a few days of being listed online. So, what can you do to improve your chances of having an offer accepted in a seller’s market? Read my 5 tips below to help give you the best chance.
1. Try to find out about the properties before they are listing online
If you can find out about a property before is listed online, it provides you with a head start on other buyers. It also means that you will have time to complete due diligence, so once the property is listed, you’ll be in a position to act quickly. Ask agents at open homes what else they have coming up in the area and “like” their Facebook pages, as they often put “coming soon” posts about upcoming listings.
2. Where possible, consider obtaining your finance approval before you start the search
Due to the number of buyers in the market, agents are receiving multiple offers on most properties (up to 20 in some cases). Those that require a 21-day finance clause are generally not being successful, unless their offer is far higher than the next and the owner is willing to wait. As they say “Cash is King”, but even if you are able to reduce your finance clause to 7 or 14 days your offer will be more attractive to the vendor (N.B. it is very important that you speak with you bank/broker first to find out what is required for your loan and seek their advice/instructions in this area).
3. Consider expanding the search to include surrounding suburbs
With the current limited supply of houses for sale it is worth considering inspecting property in surrounding suburbs. If nothing else, it provides you with more options and helps to educate you on the market conditions.
4. Find out what terms suit the vendor
When a vendor is presented with multiple offers they are assessed on price and also terms. Before submitting your offer, ask the agent what terms are preferred by the vendor. For example, if the vendor hasn’t purchased it is likely they’d require a longer settlement. Conversely, if they have already purchased (and require the funds from the sale of their property to settle) then offering a settlement on the same day as the new home can hold great value for a vendor.
5. Do you research on comparable sales
Unfortunately, the guide prices being quoted by agents at the moment are often not realistic and far lower than where the property will actually sell. It is therefore very important for you to educate yourself on the market and research similar properties that have sold in the area. The best way to do this is to inspect as many as you can and then track the sales prices. This will give you a good idea on what price other buyers are likely to pay for a property.
Missing out on properties can become very disheartening but using the above tools can help you stay in control and give yourself the best chance of securing a property. If you would like to discuss this further or need any other advice feel free to contact me on firstname.lastname@example.org