How to Read Competition at Open Homes | Propertybuyer

By Rich Harvey, CEO & Founder, propertybuyer.com.au

Walk into any open home on a Saturday morning, and you’ll do what almost every buyer does and size up the room. You’ll clock the young couple murmuring in the kitchen, the bloke pacing the backyard on the phone, the family measuring up the second bedroom. You’ll quietly form a view on who looks serious, who’s just sticky-beaking, and whether any of them might be willing to pay more than you.

It’s a natural instinct. The trouble is, you’re probably only seeing half the field and possibly misjudging the others that you can see.

The thing is, getting your read on the competition wrong doesn’t just cost you one way. It costs you in both directions.  Knowing how to read buyer competition at open homes is the difference between paying the right price and getting it badly wrong, misjudge a crowded room, and  you’ll panic and overpay for a property you could have bought for less. Misjudge a quiet one, and you’ll lob in a soft offer, feel clever about it, and get steamrolled by someone you never knew was there.

Knowing whether the competition is real or imagined, and what motivates them to attack or retreat, is a big part of the game.

So, let’s pull back the curtain on who’s really in the contest.

Bidding against you

There is a range of buyer types, both visible and hidden, that can be keen on a home. Here are a few of the big ones worth watching for:

• Interstate investors. Borderless investing has exploded in recent years. These buyers rarely set foot in the home, as they mostly work through a buyer’s agent or other trusted local proxy. They are also very numbers-driven and unemotional about the purchase.
• Interstate relocators. These are people shifting from afar for a job or lifestyle change. They’re more emotionally invested than the pure investor because this property could be their home, and they’ll usually inspect at some point. A relocation deadline often makes them more motivated, not less.
• Returning expats. Remote buyers, too, but frequently with deep pockets and a strong dollar working in their favour. Many are professionals coming home who hand the whole job to a local representative. When they see something that fits, they can be relentless.
• Local upgraders who’ve already sold. These are some of the most dangerous competitors of all. They’ve banked the proceeds of a sale, they’re sitting on cash, and they’re often racing a settlement clock. Motivated, funded and under time pressure is a potent mix.
• Cashed-up downsizers. Empty-nesters trading the family home for something smaller but no less impressive. This buyer cohort is segment-specific, as you’ll find them most at the prestige and quality family-home end, where they want room for visitors and somewhere to park their equity. They’re tough to outlast if you’re a stretched young family.
• Developers and builders. On anything with a granny-flat, dual-occupancy or subdivision angle, you may be competing with someone running a completely different calculation that’s based on what the site can become, not what it is today.
• Off-market buyers the agent is already working. Plenty of serious buyers never appear at a single open home because the agent is handling them privately, some have made an offer before the campaign even hits its stride.

And the toughest of the lot to be on the other side of is buyer’s agents.

If you’re bidding against a buyer’s agent, you’re up against the most difficult competitor in the field, and it’s worth understanding why.

We’re unemotional. We’re not falling in love with the kitchen splashback, so we don’t get rattled, and we don’t overpay in the heat of the moment. We’ve done the value, so we know what the home is worth and how to make a compelling offer. And critically, we have a professional relationship with most selling agents. Those connections, built over years and hundreds of deals, mean we tend to get candour about the vendor’s situation and the genuine level of interest that an everyday buyer simply won’t.

When the competition isn’t really there

Now, for the flip side, because this is where buyers most often hurt themselves. A packed open home feels like proof you’re in a war, but that’s not always the case.

Open-home numbers are noisy. A good chunk of any crowd is neighbours having a look at what the place down the street might fetch, renovation tourists collecting ideas, buyers who are months off being finance-ready, and a few who simply rule the property out the moment they walk in. A clever selling agent knows a busy inspection builds urgency, so the perception of competition is sometimes just that, rather than a reflection of reality.

If you read that room as twenty rivals when there are really only two, you’ll bid against ghosts and pay a premium that was never required. I’ve watched buyers talk themselves into offering thousands of dollars more against competition that didn’t exist.

The reverse trap is just as expensive. A sleepy open home with three groups shuffling through can lull you into a lowball offer, right up until an expat’s buyer’s agent, who never needed to inspect, comes over the top with a clean, strong number and takes the property while you’re still congratulating yourself on your savvy bottom-tier offer.

Quiet on the surface doesn’t mean quiet underneath. The most determined buyer in the contest is often the one you never see.

So how do you tell the difference? It comes down to asking the right questions and reading the signals most buyers walk straight past. How many contract requests has the agent had? Have building and pest reports been ordered, and how many? Is anyone coming back for a second or third look? How long has the property been on the market, and has the price guide or campaign shifted? Is the agent pushing for offers quickly, or quietly going cool?

None of these gives you a clean answer on its own but combines them with extensive experience as a buyers’ agent, and you can gain a fairly accurate picture of who you’re genuinely up against, and who only exists in your imagination.

Your real advantage

This is exactly why using a buyers’ agent is a savvy strategy. We can look at a home and tell you the buyer types it’s likely to attract before we’ve spoken to a soul. Through experienced questioning of the selling agent and a deep feel for the local market, we build an accurate profile of the genuine competition. We can tell you how that competition is likely to behave throughout the negotiation, and we can shape your offer so it’s strong where it needs to be.

Put simply, a buyers’ agent makes sure you’re never bidding against ghosts and never blindsided by a buyer you didn’t know existed. If you’re weighing up a property and want clarity on who you’re really competing with, that’s the kind of read our team does every day.

Give us a call on 1300 655 615 to start a conversation about your next property purchase, or click here to send us your enquiry today.

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