A property boom is great if you are selling off all of your investment properties and moving away from Perth to retire to a sea change destination. Prices are high and people are competing to buy better properties. But what if you are someone trying to buy into this market as a property investor?
It is tough being a buyer in a seller’s market, but there are some steps you can take to tip the odds in your favour. Here are 8 things you can do to strengthen your position.
Don’t Mess Around
If you are interested in a property, be ready to take action right now. Many investors view a property, crunch the numbers and figure out if they are interested. In a seller’s market, a good property will be gone if you wait a week.
Always try to get through the property before the first home open, so you can get a clear shot at it before the crowd of other buyers swarm in.
Get pre-approved for a loan, know exactly what you have to spend, then do your market research. If you see a property you want, make an offer immediately.
Don’t Low-Ball
In a buyer’s market, buyers can low-ball sellers and beat them out of a lot of money. In a seller’s market, the seller will just find someone else who is interested. That doesn’t mean you have to meet the seller’s price, though. Do thorough market research, put together a realistic offer based on what you have learned and if you can substantiate it with sales data to give the agent something to work with.
No Conditions
Consider making an unconditional offer. It will differentiate you from those whose offers have conditions such as “subject to finance.” Every condition is a hassle for the seller. Make it easy for them to say “yes” to your offer.
Keep in mind that there is real consequences to an unconditional offer, should you not get your finance. The seller has the right to keep your deposit. Plus if they go on to sell the property for less they can pursue you for any difference in price.
Create a Deadline
We said “no conditions,” but we didn’t say anything about deadlines. If you are ready to take action with an offer, it is only fair that the seller is ready to take action, too. A deadline of 24 hours can work wonders at motivating a seller.
Make an Offer Before the Home Goes to Auction
If a property is scheduled for auction, make an offer after an open inspection or in the last week before the auction is scheduled. Many times, the seller will take a “sure thing” instead of risking a lower price at an auction.
Networking and Leverage
If you have established relationships with enough agents, you can often gain early access to properties about to go on the market. Though it can take a long time to cultivate or build this kind of a network, there is a great shortcut: hire a buyer’s agent who has developed his own network of connections.
Believe it or not, many agents make a good living selling properties silently before they go to market.
The Holy Grail: a Motivated Seller
Try to find out why a seller is selling a home. Find out if they have any kind of a time crunch, such as being ready to move into another home already, or needing to relocate to another city by a certain date. Most homes won’t have motivated sellers, but if you figure out one that does, you may be able to get a better price by being ready to move now.
Nice Guys (And Gals) Finish First
Be nice to the seller’s agent. The seller’s agent is the only person who speaks to both the buyer and the seller. The nicer you are, the more favourably they will look at you and the more enthusiastic they will be about your offer when talking to the seller. Make no mistake they are working for the seller but if they like you, it will put you ahead of other buyers.
Call 1300 472 427 today to learn more.
