If you’ve missed out on several properties and feel like giving up, resigning yourself to paying over the odds or simply settling for second best, there are some practical ways to turn things around and give yourself the edge in today’s competitive property market.
Missing out on multiple properties is disappointing and can be especially frustrating and stressful if you’re buying to a deadline, such as if you’re a tenant hoping to purchase a property before the end of your lease, or you’ve already sold your current home prior to your next move.
But with Perth’s market showing continued price growth, particularly in tightly held areas, putting off your purchase decision could mean you’ll be facing even higher property prices down the track, or cause you to miss out on your preferred location altogether.
So what can you do to stand out and secure both the property for sale and a good outcome for yourself?
1. Make sure you’re offer-ready
Have your finance pre-approval in place and work closely with your finance broker to establish a clear borrowing limit – this will help you set the right parameters for your property search, while also showing prospective sellers you’re serious about your offer during property negotiations.
Beyond finance, you should also look to enter property negotiations with a clear idea about the offer terms that are essential to you and those that you’re prepared to negotiate. If you’re engaging a buyer’s agent, they’ll be able to help you determine which terms are critical for the property in question, and which terms are just nice-to-have.
2. Keep your ear to the ground
In this market, many properties are under offer at – or even before – the first home open, so allow time in your week to stay up to date with new property listings and respond to properties quickly. When the market is hot, properties don’t hang around. If you don’t have time to do this research yourself, consider engaging a professional who does so you’re well placed to make an offer when an opportunity is presented.
3. Get to know the market in-person
Get to know the listed and sold properties in your target area. While an increasing amount of information is available online, there is no substitute for visiting multiple home opens to understand the property styles, as well as the supply and pricing, of your target suburb. This is especially important in locations where properties are advertised without a price (such as expressions of interest and set date sale) where you, as the buyer, have to nominate the price you’re prepared to pay.
Researching a broader range of areas is another way of giving yourself the edge in a competitive market. Are there other suburbs that meet your key criteria, whether that’s in terms of price, size, yield or home features? With property supply constrained, it’s best not to limit yourself to a single suburb or market unless there is an essential reason to do so. There are also good reasons why buying in your own backyard might not be the best strategy.
4. Put your best foot forward
When you see a property you’re interested in, you need to act quickly and decisively when submitting your offer, or you risk missing out. Put your best offer on the table right at the beginning of the process. Buyers often expect the selling agent to contact them with the opportunity to improve their offer – however once the agent has informed you that you’re competing with others, they are not required to do so. In most cases the seller will review all the offers with their agent and choose the one that suits their criteria best (both price and terms). Unlike a single-buyer negotiation, they are unlikely to counter offer, and cannot counter offer more than one buyer (after all, you can’t sell one property twice!)
So, submit your best offer with both the price you’re prepared to pay (based on the advice of your property advisor) as well as your terms. Note that some terms recommended in a softer or balanced market – such as extended due diligence or strict good working order clauses – might be viewed unfavourably by sellers in these competitive conditions. While due diligence is still important, consider doing as much of it as possible prior to placing your written offer.
5. Sometimes, it’s the terms that make the difference
In certain situations, the terms of your offer can be what help you stand out. For example, if a seller is highly motivated and wants a short settlement, adjusting your terms to meet their needs might give you the edge over a buyer who needs a long settlement, with finance resting on the sale of another property.
Here are a couple of examples from our clients:
City Beach: A couple moving from Queensland to WA for work engaged our buyer’s agents to find them an owner-occupier property in a premium/coastal suburb. We identified a property in City Beach that was on the market for mid-$2 millions. After one private viewing (not even a home open), there were four offers on the table. Our client had the capacity for a cash offer and we advised this as the best course of action. While it wasn’t the highest offer, it secured the property because, being cash, it enabled the sellers to quickly place an offer on their next house.
Kingsley: We identified a 3×1 property in Kingsley for sale that matched our investor’s property criteria. The property was being sold because the seller was moving towards retirement and looking to build on a block they had already purchased. However, they wanted time to obtain funds for the development. We negotiated a lease-back clause for 18 months, allowing the seller to lock in rental accommodation while they sorted their next steps. As a result, the seller favoured our offer and our client secured the property.
5. Hire a professional
Increasingly, buyers are contacting us to leverage the advantages of a professional negotiator. As a full-time property professional, our buyer’s agent can help you:
- Make a quick and confident decision on individual properties.
- Complete pre-offer due diligence quickly and thoroughly to rule out any deal breakers.
- Assess the market price and terms required to secure the deal.
- Help you make an informed assessment when a property is on the market with an unpublished price.
- Gain exposure to off-market options through their established network of selling agents, referral partners and private sellers.
There’s no need to feel discouraged when you’re competing with other buyers for properties. Some simple steps can help empower you to achieve the results you’re after. If you’d like more information about how our buyer’s agents could help you through this process, visit our buyer’s agency page for more information.