“You could’ve asked me when COVID-19 started and I would’ve said the market’s going to plummet,” Toop & Toop’s Tim Thredgold says.
“But somehow, the exact opposite has been the case.”
Despite the real-estate agent of 35-years belief property demand would diminish, the last quarter saw buyers flood the housing market as home loan approvals were at a high of 8.9 per cent.
Yet, the inventory of houses on the market remains narrow as data by CoreLogic indicates home listings are down 11.2 per cent from twelve months ago, giving sellers the upper hand.
As premium property buyers find themselves in a seller’s market, bidding wars often result in interstate and overseas investors coming out on top.
Thredgold says despite the merciless nature of a seller’s market, there are some steps that can help you stand out and secure your dream home.
1. Have pre-approval on your finance
“The most important advice I’d give to anyone would be to have your finance up to date and approved,” Thredgold says.
“Finance pre-approval allows you to focus on properties within your budget and allows you to have a maximum offer in mind.”
In addition to allowing you to refine your house hunt, finance pre-approval shows potential sellers you’re serious about purchasing their property – helping you stand out among others at an open house who are only there to do homework.
Although pre-approval shows you have the financial backing, you should also be wary of having too many pre-approvals from multiple lenders as it can create the impression of financial instability.
2. Be certain about the property
As buyers inundate the market, vendors favour those who aren’t indecisive and make the selling process simple.
Refraining from requesting multiple inspections and subjecting the property to arduous assessments will make you a more attractive customer.
While you’re entitled to a pre-settlement inspection, Thredgold says as a buyer you need to make it clear of your intentions as early as possible.
“People under contract come forward at the last minute and say they want to make a home subject to a building inspection and all other sorts of contingencies,” Thredgold says.
“At the moment, I’m also seeing owners getting frustrated with buyers who might come through four or five times and still not make a decision.
“Owners will then often say ‘Look for the sake of a few $1000, I’m taking the [buyer] that once they sign, its sold’.”
3. Provide personal details when applying
When applying for a property, the formalities involved can make it easy to forget you’re buying from another person.
Fittingly, Thredgold says it pays off to appeal to a potential seller’s emotional side.
“Aside from just putting in your deposit and all of the intricacies of the contract on paper, it’s not a bad idea to back up your offer with some personal detail,” he says.
“Occasionally, an owner might be interested to know that a property is being sold to a family who’s planning to live in a property for a long period and call it a family home for themselves.
“Sometimes the emotional attachment from an owner might sway them to a particular purchaser.”
4. Understand the process of the realtor
Thredgold says not all real estate agents have the same processes.
By ensuring you know how they work, you won’t feel the need to be constantly contacting the agent while they consider you.
“When we’re trying to help buyers purchase property from other agents, they should understand exactly how a negotiation with that particular agent is going to play out,” Thredgold says.
“There’s nothing wrong when making an offer on a property to say, ‘Now, can you just run me through your process from here?’.”
When putting in an offer on a home, you should ask if the realtors will contact other buyers, how long your offer will stand and how long you should wait for a response