Difficult economic times have impacted the market, with more listings available as property owners decide to access the equity in their property or reduce their debt. With more properties to choose from, buyers are shopping wisely and reacting only to properties that represent the best value.
Our research shows that buyers generally respond to properties that are listed within 2-5% of their actual market value. That means that if a property is listed outside this range, buyers will see it advertised but won’t respond to it.
It’s no surprise then that there is a decrease in the number of enquiries on properties, and in many cases, properties will go a week or three without viewings. That’s a sure sign the list price isn’t close enough to current market value – and that something needs to be done in order to attract buyers.
For buyers, this is an excellent opportunity to snap up properties at very realistic prices. Serious sellers will respond to current market feedback and consider realistic offers. That doesn’t mean a seller has to give their property away – but it does mean that you can find really good value.
Often in tough markets, the banks have a much lower appetite for home loans. But we’re seeing the major banks still very keen to grant finance to qualifying buyers. It’s important to have a deposit so that you’re seen as a low-risk client. When you require 90% or less of the purchase price to be financed the banks are keen to help you – and their rates are competitive.
Important to remember is that, if you’re a buyer who is upgrading, what you lose on the swings you gain on the roundabouts. If you sell low you will also buy low. So if you’ve made the decision to sell, then listen to the market and get your home sold. Your ability to negotiate improves significantly once you have sold your existing property.
If you’re in the market to buy a property, this is an excellent time to secure your dream home. Make a shortlist of all the properties that could suit you and arrange to view them. Identify the listings that meet your requirements and represent the best value. If you see the value, then make a fair offer and keep the terms as attractive as you can. A seller will often accept a lower offer when the terms are good – especially when it comes to the suspensive condition of finance.
Speak to a mortgage originator in advance, such as Ooba. They have a Bond Indicator product that virtually pre-qualifies you. When you make an offer to purchase, supported by a pre-qualification, the seller will consider your offer more seriously.
Investors are also turning to property as good mid-to-long term investment options. Purchasing now at more competitive prices means your rental return is greater. It also allows you to be more competitive with your rental to secure a tenant.
Opportunity knocks. Don’t miss out.
Principal, Harcourts Platinum