I feel like I’m going against one of my favourite Warren Buffet quotes – “Be greedy when others are fearful, be fearful when others a greedy”.
Why? Because I’m trying to purchase a property in Brisbane, along with thousands of other buyers. And it’s not easy.
If you haven’t heard, property around Australia is booming right now! In particular, South East Queensland is experiencing an influx of buyers and price growth. Suburb’s surrounding Brisbane, Logan and the Gold Coast are seeing record attendance at open homes and regular achieving historically high prices.
Generous government grants, record-low interest rates and interstate migration are said to be the drivers of this recent boom. It’s a great time to be a seller, but not a buyer.
Here’s my story:
Unfortunately, my long term plan of buying a new Principle Place of Residence (PPOR) has coincided with this recent boom.
I quickly discovered that my usual buying tactics would not work. Previously I was able to arrange private inspections, act disinterested in a potential property and take my time making an offer.
I started to notice the market was hot when I would make inquires online, and never hear anything back from the selling agents.
I began calling agents directly, only to find that many properties were already under contract within 3-5 days of being advertised online. Call me crazy, but I still told agents that I was actively looking to buy and perhaps sellers could save some advertising fees if they showed me the property prior to listing it online.
The first property I made an offer on went into a multiple offer scenario (horrible) – Submit your best offer and the owner will pick which one they like. I thought I would go in strong and offer $3,000 more over asking. I was wrong… The winner went $10,000 higher.
The second offer I made on a property was successful and was $5,000 under the asking price. I thought I did well… until major termite damage was discovered. Safe to say this didn’t work out.
The third offer I made was also successful. The final price was $11,000 over the “offers over” price. Paying more than asking is still a hard pill to swallow for me… but unfortunately, the sellers had already declined offers of $8,000 over.
While I’m no expert, I’ve done a lot of research and attended a lot of open homes recently. Here are my tips for buying in a hot market.
- Be sure of your finances and know what you can spend. Make sure the agent know’s that if your offer is accepted, you’ll be able to close the deal.
- Treat the agent well. There are plenty of buyers to choose from. Too often I saw buyers being rude and arrogant to agents. It’s just human nature, they’re more likely to call back the buyer who was friendly and treated them with respect.
- If you interested in a property, let the agent know. I’m not saying that you tell them you “must-have” this property or it’s your “dream home”. But let them know that you’re a serious buyer and worth their time.
- Don’t point out every scratch on the wall or chip on the tiles. When there are 23 other buyers at the inspection, nobody cares.
- Accept that you’re not going to buy “below market value”. If it’s a good property, you’re going to pay a fair or more than a fair price.
- If you can, be flexible with contract dates. Ask if the seller want’s a quick or long settlement. It’s not all about price.
- Decide what you’re prepared to pay for the property and make a strong offer. If it’s a property you love, does the extra $5,000 matter over 20-30 years?
- Try not to get disheartened. If you miss out, there will be another property.
Nobody knows when this boom will end and what the outcome will be. Do your research, act smart and good luck.
It’s crazy to look back nearly a year ago when in the peak of Covid-19 property was expected to crash. Who would have thought that the market would turn around so quickly and keep rising?
To see how quickly things can change, here are some of our articles during Covid-19: