The hot real estate market is continuing to make news across Australia. Although some experts point out signs of a slowdown, the climate we are presently in is still a sellers’ market.
If you are looking for a new home in Perth right now or will be short, do not allow yourself to be put off prematurely. However, it is wise to ask yourself if this is a good time for you to buy property.
Is purchasing a home in a hot market a challenge? Yes. However, it is still entirely doable. Here are seven must-know tips to help you in your quest for a new home.
1. The Correct Mindset is Crucial
While buying a home is meaningful and exciting, never lose sight of the fact that you are engaging in a business transaction with long term impacts. Yes, the pragmatic approach dials down the fun. However, once your mission is accomplished, you can celebrate till your heart is content.
You will also want to temper your emotions and have an open mind as you view various properties. Some glittering gems will turn out to be faux, while you may find several diamonds in the rough you nearly overlooked.
Be sure you know your limits. If you are buying with a partner, be sure you are on the same page. You will not have days to ponder and discuss finances in a hot market. Decisions must come quickly, so know where you stand financially before viewing your first property.
2. Be Ready to Act
You cannot overstate the need for preparedness in a hot market. Be sure to have your financials in order.
Nail down a loan preapproval as opposed to a prequalification. The preapproval is more thorough than prequalifying and can boost the seller’s confidence in your ability to purchase the property without loan uncertainties.
Walk into the home with a blank cheque so you can deposit if you like what you see. Once again, immediacy and urgency are necessary to win the day in a seller’s market.
3. Make Your First Offer a Good Offer
You can put money on the fact that a seller who receives several offers will not spend time haggling. Put your offer in writing and, if at all possible, make it unconditional.
Even if your offer is reasonable, you may find yourself in a bidding war. In these situations, emotions run very high, and you may find it tempting to pull out all the stops to be the highest bidder. If your budget has room for negotiating, consider adding an escalation clause up to a preset limit. You can compete with other buyers, but you will not spend too much in the heat of the moment.
4. Be Cautious with Contingencies
While you want to go forward with a home inspection contingency, be willing to forgo others you may have had in mind. In other circumstances, thoroughly reviewing the Homeowners Association paperwork may be fine. However, you want a straightforward approach in a hot market.
Avoid asking anything of the seller until your offer is accepted. They may be perfectly willing to sell the refrigerator to you but talk about these things once you know you are the chosen buyer.
5. Consider Making an Early Offer
If you plan to buy a home at an auction, consider making an offer ahead of the auction. The vendor may be happy to accept a fair offer and avoid the uncertainty of an auction. Usually, the best time to approach an offer is during the week before the auction.
Tension is building at this time, and a reasonable offer may seem like a godsend.
6. Put a Deadline on Your Offer
This idea may seem counterintuitive at a glance. However, you can gain an unexpected advantage by using this strategy.
A well-qualified buyer with a deadline can often spur a seller to action. Saying that you are interested in several other properties, and you need a response in 24 or 48 hours, or you will move on may surprise a seller. But it shows you are serious and not planning on dragging your feet.
7. Work with an Experienced Buyers Agent
Having someone who knows the ins and outs of the business is exceptionally valuable. This is especially true if you have little or no experience purchasing a property. It makes the playing field level when you consider the fact that the seller has a professional in their corner. Additionally, a buyers agent can help you stay on top of the market and get your foot in the door of just-listed property ahead of the crowd.
Purchasing a home in a seller’s market can be challenging. For more information or to discuss your buying options with one of our agents, please contact Nest Realty. Our experienced team is ready to help you buy your new home.
** Please Note**
The material in this post is for informational use only. It is not intended to be binding advice regarding matters of real estate purchases or sales. Always consult with an experienced professional before making significant real estate decisions.