Property buyers who hold off in the hope the market will cool by the end of the year, will end up paying tens of thousands more for the same property, according to leading buyers’ agent and vendor advocate Miriam Sandkuhler of Property Mavens.
Sandkuhler says prices are tipped to grow by almost 20% in some areas by the end of the year, which means delaying now can add a lot more to the purchase price.
“If you’re looking at buying a $600,000 property in Perth or Sydney today, potentially by the end of the year that’s going to be $720,000,” she says.
“So, time is of the essence. Interest rates are low, currently the demand is high and stock levels are exceptionally low. They are not meeting demand and prices are escalating as a result of that. They’ll continue to increase.
“There’s nothing indicating in the short term that the market is going to slow down.”
Sandkuhler, guest presenter on a webinar hosted by Hotspotting, says it is essential that all buyers, whether owner-occupiers or investors, know how to price a property.
“I say to people there are three prices,” she says.
“There’s the price you want to pay, the price it is appraised at and then there’s the price you need to pay under competition to actually purchase the property, which has got nothing to do with what you want to pay.
“If people can’t reconcile that in their mind and get to that point, they’re likely to keep missing out – bearing in mind that it may cost you an extra 10% or even 20% over the course of a year, based on the forecast growth.
“The most important thing home-buyers need is unbiased advice – and to be careful where you get your advice from.”
Sandkuhler says most well-meaning family and friends do not have the knowledge or resouces to keep up with the current market, as it is changing so quickly.
“When it comes to buying property, pricing is everything. If you don’t get the pricing right, or you’re not willing to meet the market, then you’re going to keep missing out. And time in a fast-moving market is money.
“The longer it takes you to buy a property, the more those prices will escalate. And the more you’re either going to have to find more money or make compromises.”
She says a buyers’ agent can be a valuable asset in a hot market, advising on what a property is worth and helping to quickly secure something. While many buyers will baulk at paying for expert advice or assistance, often by the time buyers have done it by themselves and finally secured the right property it has taken a few months and the market has risen 10%.
“It’s already costing more than what they would have paid me to help them in the first place,” Sandkuhler says.
“Draw a line in the sand around how long are you going to give it a go yourself. If you miss out, consider engaging an experienced buyers’ advocate and they will help you not waste time and to make an evidence-based decision.”
While all buyers will start out with a wish-list, Sandkuhler says it’s essential buyers be prepared to compromise.
“If you can’t be flexible in a fast-moving rising market, you can be pretty well guarantee that you’re going to miss out.
“Things have to happen quickly. You need to respond quickly and you need to be prepared to be flexible.”
Being prepared means securing finance pre-approval, conducting research about what you want and what it is likely to cost and forming your team of experts including insurance brokers and legal advice.
Sandkuhler says failing to do due diligence is like going to the casino and putting $600,000 on a roulette table, hoping everything will be okay.
It’s just as important to do your due diligence when choosing an agent to sell your property.
Check they are registered with relevant state real estate institutes, check Google Reviews to get a feel for how they treat their clients and don’t be afraid to ask for their previous results and references from previous clients.
“Ask specific questions around how they generate results and deal with buyer inquiry,” Sandkuhler says.
“Ask ‘who’s going to look after me?’ And make sure they are not going to pass you on to a junior.