4 tips on how to handle a hot market.

So you’re wanting to get into the property market, get in line friend! You might be out there looking to buy an investment property or perhaps it’s a home to live in, whatever you’re on the hunt for, one thing is for sure, you’ve found yourself smack bang in the middle of one of the hottest markets we’ve seen in our 10 years in real estate. SO GOOD LUCK!

Aside from the seemingly never-ending media reports telling us real estate is on fire, you are also likely to see nightclub long lines at open for inspections, 5 + bidders at auctions, fewer properties to choose from and agents as hard to get a hold of as hand sanitizer in 2020!

In this week’s blog we want to cover a few things about how to handle a rising market. We’ve been in this game far too long to advise anyone to sit back and wait for things to cool down. If the time is right in your life to purchase a property you better get amongst it because we don’t see things slowing down anytime soon, at least not for the remainder of the year.

So listen up for some very important tips.

1.     Be Prepared

Typically in a strong market, you’ll find most agents won’t entertain offers prior to auction, they want to take their listings right through to auction day. There are a few factors at play here. Firstly, it’s a headache for them to take offers before auction, there’s often little to no transparency which leaves them with more than a few disgruntled buyers, they often need to work overtime and without the auction conditions locking buyers in it can be a risk to the vendors. On top of that, in strong market conditons they’ll usually achieve a better price going to auction unless they only have one stand-out buyer. In saying that, some will sell a property after 1 inspection even when it’s scheduled to go to auction, so it’s best to have your ducks in a row so you can pounce as soon as you inspect. If you know it looks like a good fit online, try to get through the first inspection.

2.     Buy unconditionally.

Have your finance ready to go, so if it is a private sale you don’t have to include any special conditions which will make your offer weaker. Have your conveyancer on stand by to check the contract within 24hours of you receiving it. Have your building inspector on stand-by and make sure you have done all relevant due diligence.

3.     Ask questions & be nice

This is in any market, but especially in a hot market. The question ‘will the owner look at offers prior to auction’, is very important, because if they will, usually it’s best to make a strong offer very early on in the campaign, but best to put a deadline on your offer, ie; 48 hours. Also, ask about the owner’s settlement preference. Giving the owner the settlement they want might put you above the competition. In regards to private sales, it is key to ask the agent how they will be handling offers. Is it best and final? Or will they allow the first person to submit an offer to have one more go?

The agent is the gatekeeper to the vendor who you are trying to win over with your offer, and they also hold all the knowledge around interest levels. It pays to be nice to these guys as they may give you some extra intel if you are!

4.     Stick to your plan

Don’t get swept up in the chaos of the market. We often see people panic buy in this type of market. Make sure you are still buying a-grade real estate. Don’t cut corners just because you don’t think you will be able to get into the market. In any market A-grade real estate performs the best. So whilst you feel you are stretching to buy it now, it will perform well for you over time. Consider the streetscape, orientation, area, access to transport, noise, access to school, oh gosh, there’s a bit.. we’ll go through it in more detail in the next blog.. but that should get you started!

Particularly in a rising market, always consider property as a long game. Stretching the budget in a market like this to buy an A-grade property is not silly. Get in and hold hold hold.

Tabitha