As we approach the start of the spring selling season this weekend, it’s hard to predict what the supply of new listings will be but it’s likely that competition in the property market is hotting up to increase.
According to The Real Estate Buyers Agents Association (REBAA) this is traditionally the most stressful and frustrating time of the year for house hunters. So what can buyers do? Here are REBAA’s tips for surviving the spring buying season:
Step 1: Be prepared
REBAA TAS representative Rob Zubin from My Property Hunter recommends the only way to survive the spring selling season is to remain positive and be prepared to compromise by widening your search area.
“Be prepared to miss out on properties especially if they’re overpriced but also recognise that to be successful buyers need to make strong offers, and they need to be able to quickly assess what ‘fair price’ is in today’s competitive market using informed research,” he says.
“Buyers need to have a good grasp of contracts along with terms and conditions, recognise that it’s really not a market to play hardball and finally if you’ve done your homework be prepared to commit. Without commitment, it makes it challenging to succeed.”
Step 2: Get your finance approved
With Australia’s lending policy a rapidly changing landscape, some borrowers are currently finding themselves ineligible for property purchases at the worst possible time.
REBAA VIC representative Leigh McConnon from Buyers Advocate said in the current banking climate the risks to buyers who purchase without lending pre-approval firmly in place, were significant.
“It’s vital buyers obtain finance pre-approval and if you are in a position to make an unconditional offer this can go a long way in this current market to obtaining the price and terms that work best for you,” he says.
Obtaining genuine pre-approval relies on the bank’s assessment being conducted with multiple supporting documentation including but not limited to:
payslips, records of savings, credit card statements, proof of identification;
clear visibility on employment status, debt repayment conduct, lifestyle commitments and ‘character’ of the applicant.
Step 3: Be decisive
REBAA SA representative Paul Siwek from Logica Property urges buyers not to rush in but don’t waste time when a good deal presents.
“Be prepared and ready to make a firm decision once a good property becomes available,” he says.
“To do that, start early to become familiar with the market but also have a written search brief and keep fine tuning it as the search progresses – that way you would be ready to ‘strike’ with confidence once a property that matches the brief well becomes available.
Step 4: Negotiate hard
REBAA NSW representative Sebastian James from Hunter James warns buyers not to be bullied into pre-auction offers and to negotiate hard to try build in a buffer against possible correction.
“Do not rely on guide prices and comparable sales provided by selling agents when estimating value and take into consideration the market conditions,” he says.
“For medium term capital gains look for areas with price disparity from neighbouring suburbs and where growth drivers such as infrastructure, rezoning and gentrification will see the area outpace the averages.”
Step 5: Have a plan
REBAA QLD representative Scott McGeever from PS Property Advisory says it’s wise for buyers to have a plan, before they buy, on how long they intend to live in their desired property.
“Ask yourself is it your forever home or a stepping home that can be an investment property in the future?” said Mr McGeever.
“This will make a difference to how much you should be prepared to spend. If planning to extend or renovate, speak to someone reliable regarding expected costs before making an offer.”
Mr McGeever also warned buyers against any plan to terminate the contract on cooling off terms as this strategy can prove costly.
Step 6: Stick to your budget
With so many properties going to auction in spring it’s easy to be swept up in the moment when bidding.
REBAA ACT representative Claire Corby from Capital Buyers Agency reminded buyers that auctions were designed to be “a moment of theatre” to elicit the top price for the seller.
“Have a clear budget, specify a maximum bid amount in writing before bidding and be prepared to walk away,” she says.
“There will always be another property coming up for sale. Know what you want, know what you’re willing to give up, and stick to your budget.”