Last year I wrote a piece on the property cycle and how it looked as if we were moving into a hot market – my advice then was to buy before the heat hit. Unfortunately, our often conservative human nature holds us back when things are slow and the market feels unsure so I don’t blame you if you didn’t heed my advice! Now now this relates to buying a house in a seller’s market.
Nine months on, with auction clearances rates up around 85% in parts of Sydney and 73% in parts of Melbourne many people are fighting to buy – often throwing money at substandard properties. Before you make that mistake, ask yourself…
“Would I have bought this property a year ago?”
If the answer is no, then walk away!
The way to buying a house in a seller’s market is to ignore the frenzy but pay the asking price for a good property that will make you a happy family home or a good long-term investment. Here’s how:
1. Do Your Research
Unless you hit the streets to see what your competition is and what properties are truly selling for, you’ll be putting yourself in a very vulnerable position. With all the hype, it’s easy to overpay and that’s not what we are advising!
Knowledge is power and buyers who understand the true worth of a property who will most likely be the successful purchaser at the right price for the right property. Get serious about your research and keep a spreadsheet of what properties are selling for. Compare bedrooms, parking, position, aspect, land size etc.
2. Don’t Look Back
Don’t torture yourself with what you could have bought a property for this time last year, 6-months ago, 3-months ago. Accept that the market is on the move and go with it.
[Tweet “The best time to plant a tree was 20 years ago. The second best time is now. – Chinese Proverb”]
3. Listen To The Market And The Selling Agent
If you can see, with your own eyes, that good property are selling within days of hitting the market or a Selling Agent tells you, “this probably won’t go to auction”, believe them and be prepared to move quickly with your offer.
4. Move Quickly
All too often buyers find themselves in a situation where they would have paid the asking price or more but someone else was ready to exchange contracts. Vendors will often take the proverbial bird in the hand so there’s no point lamenting, “I would have paid more” if you just weren’t ready. So, when you see a property that ticks many of the important boxes move quickly:
- Make sure your conveyancer/solicitor is working on the contract
- Get your strata report ordered or
- Get your building report done (or both)
- Get your finance and deposit organised
5. Most Importantly, Don’t Get Desperate!
Yes, you have to move quickly to buy the right property but if you’ve missed out on a few, don’t panic and don’t give up either. If you feel exasperation building go back to that all important question, “would I have bought this property a year ago?”.
It’s better to move on and pay a little more for the right property than to be stuck with a lemon that you won’t enjoy living in or that won’t bring you solid capital growth. Lemons don’t sell when the market softens again!
6. Lastly, Enjoy the Process And Stay In Control
No matter what information is being thrown at you, keep a clear head and be sure that you’re are happy with your decision. Buying a bad property doesn’t come with a 2-week return policy so stay strong, in control and have fun with it and follow the guide to buying a house in a seller’s market.
Published:- 20 Feb 2014
Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.