With Perth’s property market in overdrive, there’s a growing trend amongst selling agents to advertise properties without a set price. As you browse real estate websites, terms like ‘offers’, ‘expressions of interest’, ‘contact agent’ and ‘express sale’ are becoming common replacements for a numeric value. Selling agents use these tactics when looking to test the waters in a changing market, but this can create confusion for buyers who are looking to enter the market.
Approaching a property that hasn’t been listed with a set price can seem daunting, after all, how do you ensure you’re paying market value and not overpaying? Fortunately, there are several tactics and steps that prospective buyers can take when considering properties that have been listed without a set price.
Utilise online research tools
Keeping your finger on the pulse and conducting research on what is happening in the local market is incredibly important when making any property decision, but even more so in a moving market where property prices are already fluctuating. If you are interested in a property that is listed without a price, real estate websites can be a great starting point in determining a rough guideline of the asset’s worth and there are two main ways to harness their power.
Firstly, the ‘price range’ feature on popular real estate websites is a fantastic tool to begin to narrow down the price of a property. By experimenting with the minimum and maximum price range of a suburb, you can monitor when the property you are interested in appears on the website. This information helps provide a general price bracket that the selling agent thinks the property might sell for and can be a useful first step in discovering if this particular property falls within your budget.
Historical sales data
Historical sales data from the last 6 months is another tool offered by real estate websites that can help you gain a more granular understanding of the market you are interested in. However, it is important to understand just how quickly a market can move, especially one that is in a recovery phase. Property sales data may appear black and white, but it can be misconstrued or lead to incorrect conclusions, particularly where some information about the property or the circumstances of the sale are not captured by the database you’re relying on. Consistent monitoring of the market is vital when determining property prices as the rapid pace of change may make even recent data redundant.
Become familiar with the suburb
Having intimate knowledge of a suburb and an understanding of the other properties that are for sale in the same area ensures buyers can make informed and educated decisions. In addition to online research, attending home opens in-person, especially for properties with similar features to those you are interested in, can be a fantastic way to gain an understanding of price expectations and buyer interest within the local market. These home opens also give buyers the opportunity to become familiar with the suburb they are interested in, which can in turn help them identify both positive and negative aspects of the local area that may have an impact on prices.
Be aware of selling agent tactics
Due to the nature of their work, selling agents are incentivised to get the highest returns for their client. When selling a property, this is an attribute we value in an agent, but when on the other side of property negotiations and looking to make a purchase, there are several tactics that buyers should keep an eye out for. Selling agents will often provide a list of comparable properties that can help potential buyers gauge the value of a property. Whilst potentially valuable information, buyers need to be aware that this data can be skewed towards the upper quartile of sold properties, therefore inflating prices above their true value. The other information that can’t be garnered from these comparable properties is the impact that emotional purchases may have on prices. Owner-occupiers that feel an attachment to a particular property may pay above market value to secure their dream property, therefore pushing up sold prices.
The way a property is staged is another way that selling agents try to illicit positive emotions, and therefore increased prices, from buyers. Astute buyers need to look past staging and environmental factors and focus on the elements of the property that can’t be changed like the location and the floor plan. By focussing on the permanent features of a property, and pairing this with comparable market data, potential buyers can uncover the true value of an asset and make a more objective purchase decision.
Be ready to act
Looking to purchase a property without a price guide is hard, but looking to buy a property without knowing how much you can spend is even harder. Gaining pre-approval from a lender gives your property searches clarity and allows you to focus your activity on targeted and realistic properties. In addition, many lenders are experiencing lengthy delays due to increased activity and heavy scrutiny of applicant’s finances. Early organisation of your finances and being prepared before applying for a loan will place you in a strong position with lenders.
Pre-approval has the added benefit of positioning you as a more attractive buyer to sellers as it highlights your readiness to buy and minimises the chances of your offer falling over due to a finance non-approval. In a tight market, with several buyers potentially competing for the same property, pre-approval may be the difference between securing your desired property or walking home empty handed.
Enlist a Buyer’s Agent to negotiate on your behalf
Negotiating on properties without a fixed price guide can understandably be a daunting and time-consuming prospect. If you don’t have the time to research the market and compare different properties, if you’re not confident in your research, or if you’d prefer professional representation during property negotiations, a buyer’s agent is an invaluable resource when entering or re-entering the market. Buyer’s agents are experts within the local market and will use stringent purchase criteria and proven research methodologies to assist you in determining the market value of a property and setting the right negotiation strategy to acquire it on your behalf. Buyer’s agents can also act as a third-party buffer when it comes time to make an offer on a property, and go beyond the price to also negotiate favourable contractual conditions that protect your interests and minimise risk.
If you are looking to buy a home or investment property and would like to speak to our buyer’s agents about which negotiation strategies are right for you, our team would be happy to discuss your needs in an obligation-free consultation.