By Rich Harvey, CEO & Founder, propertybuyer.com.au
With the post-COVID property market moving so fast, even professionals who have been in the industry for decades are struggling to accurately price properties.
Houses and apartments are flying off the market in mere days, and auction results continue to smash suburb records. Against that backdrop, the average homebuyer or investor doesn’t stand a chance of keeping up with median values or finding a property within their budget before someone swoops in with a better offer.
If you’re nodding along and relating to every word, I don’t want you to be disheartened. Instead, I’ve put together some tips to help everyday buyers stay up-to-date with our rapidly evolving real estate market, so you don’t risk falling behind.
Of course, these tips are the heavy lifting we buyers’ agents do daily for our clients.
Tip #1: Tap into your real estate agent networks
Chat to local agents who have their finger on the pulse of the market. They are an excellent source of up-to-the-minute information about values, sale rates and buyer interest. They also have options on how fast values are rising too.
Keep in mind, they are working for sellers, so they will tend toward being bullish in their observations. Even so, recent sale prices supplied by agents are a good litmus test.
There’s also an opportunity to outline your requirements and give a broad indication of your budget if you’re actively hunting for a home. When you develop a relationship with an agent, you’ll hopefully jump to the top of the list of potential buyers they call when a suitable home comes onto the market. To find switched on local agents, browse the latest classifieds and take notice of the names and faces that pop up over and over again; these are the suburb’s busiest professionals.
Tip #2: Build a sales database over time
If you’re regularly trawling real estate sites for auction results, it’s a good idea to keep a database you can refer to.
Jot down information such as block size, number of bedrooms and bathrooms, and the age of the property (or any recent renovations), along with the final sold price. If you notice it’s later advertised for rent, note that down too – that way you’ll have a picture of investors vs owner-occupiers as well.
Tip #3: Attend auctions, even if you don’t intend to bid
Spend a few Saturdays attending auctions in the local area, to get a feel for the competition and the atmosphere. This helps in two ways – you can scope out the kind of buyers you’ll be battling it out with when you are ready to purchase, and you can get used to the auction vibe. This way when it’s time to bid on your own property, you’ll have fewer nerves.
Often you can ask the agent on site about the number of registered bidders as well. Keeping track of this can help paint a picture of demand for your desired property type and at your price point.
Tip #4: Be aware of listings as well as sales, and analyse this data
Keeping track of both listings and sales will help you figure out how many properties are available, how quickly they’re selling, and whether they’re selling for more than the advertised price. This will assist in working out how much to offer, and when to back down from a potential purchase if it’s likely to overstretch your budget.
Take note of any interesting trends, especially asking prices vs sale prices. This will also help you spot any marketing spin or under-quoting that some agents use.
Tip #5: Factor in a reasonable premium
If you’re buying a home to live in, or to rent out for a long time, you’re virtually assured of capital growth over the years. Paying a little bit more today to get the perfect property right now, might be worthwhile, especially if you’re planning to be there long term. The extra $50,000 to 100,000 spent today (if you can afford it) will seem like nothing when the home is worth twice its current value in 15 years’ time.
Just make sure you get reasonable independent guidance of what a fair premium is under current market conditions. Again, this is where a buyers’ agent is invaluable.
Tip #6: Look long-term
Don’t make the mistake of being blinded by a dazzling property and forget to take into account the area. There’s a reason the “worst house on the best street” mantra has helped so many people build wealth through real estate. You can always change the house, but you can’t do much about the location and position.
Don’t forget the demographics, and how this can evolve. Gentrifying suburbs are a great example. They may still be a little rough around the edges now, but as more hipsters and families move in, home values are bound to soar.
Thinking about the long term can put the property’s value into perspective, particularly when it feels a little high.
Tip #7: Develop a must-have list
Must-have lists help you weed out inappropriate listings early. This saves you time and allows you to make speedy decisions when markets and property values are moving so quickly.
If it’s important to be close to good schools or public transport, then put these at the top of your non-negotiable “must have list”. You may need to compromise on some of your other features, but don’t compromise on the must-haves.
#Tip 8: Work on your mindset.
Sitting on the couch, scrolling through unaffordable homes on your phone while having a whinge is the worst thing you could do!
Re-frame your thinking. Focus on what you can afford, and the untapped potential in those properties. Look to the future, and what could be achieved, rather than focusing on the fact you your dream property seems out of reach right now. You will reach your goal eventually, so focus on the facts and figures and don’t let your frustrations get you down.
Staying ahead of the game when markets move at a pace takes time and effort. This really is where buyers’ agents flourish. IF you are feeling overwhelmed by the real estate game, don’t hesitate to call an independent professional like Propertybuyer. We maximise you chances of securing the right home at the right price, no matter how fast markets are moving.
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