March 2014 - Secrets for Frustrated Home Buyers
By Rich Harvey, Managing Director propertybuyer
Welcome to your March propertybuyer market update.
In this edition we look at:
- Secrets for Frustrated Home Buyers
- Hot Property Alert
1. Secrets for Frustrated Home Buyers
We all know the Sydney property market in particular is hot which is causing home buyers a lot of frustration, disappointment and discouragement. Many home buyers we speak to are feeling the dream of home ownership slipping away or that they just can’t find the “right” property that suits their needs. Auction clearance rates have been trending around the 80% mark or higher since early February. Stock levels are lower than last year and interest rates are set to stay low for the remainder of the year. There do not appear to be any major economic reasons for the market to dramatically correct or downturn, apart from a potential slow down due to affordability constraints.
I was reflecting on some recent home buyer clients we have assisted in the past few months which has prompted me to write about some of the ways to overcome these common frustrations. I empathise with home buyers seeking to move in the current market. It’s so tough out there in a competitive market! For an average unit on the Lower North Shore or Eastern suburbs, you will see about 90 to 100 groups attending inspections during the 4 week auction campaign and around 15 contracts issued. Then come auction day there are at least 10 registrations, competitive bidding and a result typically above reserve price. How do you compete with that?
The secret to success is to be organised, know what you’re looking for, have a plan and the right support team around you. Below are five key steps we take our clients through to get a foothold into the current market.
1. Create your Buyers’ Brief – The first thing to do before you jump on the internet and start searching is to create your wishlist. Sit down with your partner/ family and write a summary of the things you really want in your next home. Your budget will obviously determine how far you can go- then sort your list into things that are “essential” and “desirable”. Consider your lifestyle, commute to work, sporting/ leisure activities and social network. Think about which suburbs are affordable and best meet your needs. Then consider the size and style of home, floorplan, features and finishes you want. You will need to compromise somewhere along the way unless you have an unlimited budget! I recommend you think location first, then features. Your refined wishlist then becomes your “Buyers Brief” – this is your “filter” for the next step.
2. Research – With your buyers brief etched into your memory, now it’s time to search the net and attend open inspections. This is the most time consuming part of the process. We recently assisted a client purchase in Waverton. We had spent time with this client showing a number of suitable suburbs and providing some background research on recently sold properties and past performance of the suburbs. This served as a good reference point for the client to fully understand what their budget of around $800k could buy.
One of our key secrets to success is our strong relationship with sales agents. They seem to treat us differently to ordinary buyers as we are repeat buyers and understand the process of exchange intimately. Even in this hot market we are finding that a lot of agents are giving us access to many off-market opportunities. Many sales agents are being swamped with inquiry and they just can’t manage their call backs and follow up. We make the process so much easier for the agents because we deliver on our word and only present genuine and reasonable offers and then effect the exchange very quickly. We have an extensive agent database that we use to contact every selling agent in the target area to uncover a very wide range of opportunities. Our local knowledge of market conditions and buying trends also puts the client in the most informed position. We call this the “insiders view”.
3. Shortlists - The research step should throw up several possible properties that then need to be culled to “best fit”. Many properties are listed with an “offers over” approach which in many cases is severely underquoting the likely sales price. We vet the properties for our clients to ensure we are not wasting time on a property that is never going to fall within their budget or meet the main criteria required.
4. Appraisal and due diligence – Once the right property is found we use our local knowledge and comparative sales database to provide a written and detailed appraisal report. Our in house valuer provides a recommended purchasing range which helps protects our clients from over-paying and gives our clients the best information. We also coordinate the pest and building inspections (or strata inspections if for an apartment). We have found that our appraisal reports have been very accurate and within 2% to 3% of actual selling price.
5. Negotiate and secure - This is one of the key steps where my team of buyers agents really shines! We discuss an offer strategy with our client and then commence negotiations with the agent. We have learnt from over 1650 transactions how to best get our offers accepted. We treat the agent with absolute professionalism and aim to secure the property at the lowest possible price for that market. While we are not miracle workers we have been highly successful at buying pre-auction purchases. Getting intelligence from the agent on the position of other buyers and where they are at is extremely helpful for our negotiations. Again – we tend to get the inside running on a lot of opportunities. Our client buying in Waverton ended up getting the property for $35,000 less than our appraisal and beating another buyer ready to exchange.
The end result is that our client felt more empowered with knowledge, more confident to make an offer and more comfortable with the overall buying process. Once our client understood that we were not trying to wedge them into the first property that came along, but instead listened to our advice and trusted the judgement of the buyers’ agent, they were able to move forward confidently.
What point are you at in your property search?
1. Ready to give up,
2. Pressing on in frustration, or
3. Ready to outsource to an experienced Buyers Agent.
Tapping into the knowledge and experience of a professional buyers agent can save you a heap of time, headaches and months (or years) of frustration in searching for that elusive home.
If you are in the market to buy a home or investment property we would love to assist you. Call my friendly team of buyers agents on 1300 655 615 today to get the upper hand in a hot market.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.
3. Hot Property Alert
This month we have uncovered some fabulous off market opportunities for our subscribers. As buyers’ advocates we are constantly searching the market for solid investment property deals.
NOTE: We have access to a wide range of established properties and brand new properties (both on and off market) from which we can hand pick the best opportunities. For developer stock, don’t forget that we can get all the sales commission rebated to you so you end up paying a wholesale price – call us today and ask us how. Our specialists cover both residential and commercial property.
1. Location: Newcastle - off plan apartments in superb location. Prices from $375,000 (1 bed) and $555,000 (2 beds)
- Small boutique new development of just 16 apartments in one of the premium suburbs of Newcastle
- Tightly held area walk to trendy coffee shops, restuarants & boutique shops
- Walk to stunning beach, bus past front door
- Solid yield & capital growth area with excellent depreciation benefits on the property
- North facing balconies - great light all day
- They will be "tenant ready" with blinds included
- There are only 3 x remaining 1 bed at $375k
- 1 bed 64m2 and 2 bed 88m2
- Expected rental $390pw (1 bed) to $560pw (2 bed)
2. Location: Brassall (Brisbane) - Brand new 4 bed from $329,000 to $349,000
Brisbane is one of the key markets that we have identified for investment opportunities in the next property cycle. We have uncovered a motivated vendor that has secured several house and land packages from a mortgagee sale in Sovereign Park, Brassall. Now you can benefit from buying at a price that is around 10% less than the median house price in Brassall. These are some of the most affordable prices I have seen in this area. Plus as a propertybuyer client, you will be able to also receive a $20,000 rebate from the listed price which will more than cover our sourcing fee ($9900). So this effectively reduces the price another $10,000!
- Limited land release on generous size lots
- Internal parklands and building covenants to ensure high quality building standard
- Only 2 lots left
- Located 4km from Ipswich CBD
- Likely to see strong capital growth
- Prices that are 10% below the median new house price in Brassall
- The most affordable house and land packages in Brisbane
- Rebate of $20,000 available
Package price: $329,000
Land size: 450 m2
Land price: $149,000
Build price: $180,000
Rent appraisal: $340-$360per week
3. Location: Brisbane (Mt Gravatt) – Off plan apartments 1 bed from $370,000, 2 bed from $435,000, 3 bed from $495,000
Located on the border of Holland Park West and Mt Gravatt East this boutique block of 34 apartments is ideal for investors to get a foothold into the Brisbane market at a very competitive price point.
Perched at the top of the most exclusive street address in Holland Park West and Mt Gravatt East, “Summit on View” offers breathtaking city and Mt Cootha views. Surrounded by lush bushland and spoilt by endless lifestyle amenities, Mt Gravatt East is one of Brisbane’s largest and most established suburbs, just over 8kms south east from the CBD and less than 2kms to native bush reserves scattered walking and bike trails.
Brief highlight summary of the project is as follows:
- High quality schedule of finishes throughout, including thoughtfully designed floor plates with complete separation of bedrooms and great flow between living/dining and oversized large balcony areas
- Easy access to two of Brisbane’s largest Westfield shopping centres with cinema complexes, libraries and dining precincts, all major department stores and approx 400 specialty stores - all close by
- Close proximity to two of Australia’s largest Griffith University campuses, Mt Gravatt and Nathan, which are intertwined with the walking and bike tracks throughout the reserves
- Close proximity to a range of essential services: shops, restaurants, farmers market, specialty stores, gyms, hotels, a variety of schools and childcare centres, universities, business district, hospitals, sporting facilities; plus much more
- Magnificent panoramic views
- Regular and plentiful bus services and the city's proximity make the daily commute quick & easy
- High amount of detached dwellings and owner occupiers; and
- Low rental supply with a high demand for quality properties
Pricing: 1 bedroom apartment starting from $370,000
2 bedroom apartments starting from $435,000
3 bedroom apartments starting from $495,000
(Note: rebate of $15,000 available).
Size: Internal 64 to 114m²
Balcony: 13 to 49m²
Courtyard: 48 to 114m² (only 4 available)
Total: 80 to 234m²
Rental Return: $425 to $460 per week for 2 bedroom apartments (estimate only)
$480 to $510 per week for 3 bedroom apartments (estimate only)
Body Corp: $1,800 to $2,100 p.a. (plus GST), depending on size and location of the
apartment in the complex
If you are interested in any of the above please contact Jason Low (Manager- Client Relations & Strategy) 1300 655 615 or 02 9975 3311 or email your enquiry to firstname.lastname@example.org
To review the full details of these opportunities you will need to sign a simple confidentiality agreement which protects our interests in the property. If you purchase a property, a fixed sourcing fee will apply.
We look forward to assisting you.