It’s a competitive market in Perth right now, but a few key strategies can give you an edge over other buyers while helping you recognise an investment-grade property.
After notching up price growth of 11.2% over the 12 months to February (CoreLogic) – and with more gains expected for 2022, competition is well and truly rising as investors return to Perth’s property market.
In December 2021, a normally quiet month, selling times were down to an average of just 16 days according to REIWA.
With buyer demand high, and limited stock listed for sale, Momentum’s buyer’s agents are finding that high quality, investment-grade stock is moving extremely quickly, often with multiple offers on the table and above asking price.
Don’t be driven by FOMO – remember the investment fundamentals
Buying property involves a significant financial commitment, and you need to make sure the property you buy stacks up as a good investment. However, in today’s market, FOMO (fear of missing out) can see buyers leap at the next available listing.
That’s why teaming up with a buyer’s agent can make a valuable difference. Our case studies below illustrate just how quickly Perth properties are selling – and how our experts have been able to help investors secure a quality property while also ensuring that our clients don’t overpay.
Property 1: Ocean Reef
- Specifications: 4 x 2 house
- Attracted: Approximately 20 groups at home open
- Time to sell: 8 days
- Number of offers: 4
- Stand-out aspects: 4 x 2 with double garage and multiple living areas, large 824 sqm corner block, high land value with duplex development potential. Suburb has low rental vacancies, plus high demand/tight supply to underpin growth potential.
Outcome: Momentum was able to secure this property on behalf of our client. Our offer was not the highest on the day, but by offering competitive contract clauses we were able to position our clients as the preferred buyers.
Property 2: Thornlie
- Specifications: 3 x 1 house
- Attracted: Strong interest including from interstate investors
- Time to sell: Offers made within 24 hours of listing
- Number of offers: 9-10
- Stand-out aspects: Duplex R30 corner block with the potential to retain and build. Walking distance to Thornlie Train Station.
Outcome: Listed as ‘from $419,000’, our investigations revealed the agent was looking for offers in the mid-$450,000 range. The property sold for $480,000 for a cash offer (our buyer’s cap was $450,000). We were happy to walk away from this negotiation as we believed the buyer had overpaid for the property.
Property 3: Beckenham
- Specifications: 3 x 1 house
- Attracted: Over 30 groups at home open
- Time to sell: 4 offers following Saturday home open, under offer by Sunday
- Stand-out aspects: Duplex block, low price point – listed for $360,000.
Outcome: The property sold for over $400,000. Momentum did not place an offer on behalf of our client due to foundation settlement issues with the dwelling’s walls.
5 steps to stand out from the competition
In Perth’s current market, buyers need to position themselves so they have an edge over the competition.
Having the right strategies in place can help you act quickly and decisively and ensure you’re among the frontrunners to secure a property that offers the trifecta of value, tenant appeal and solid capital growth prospects.
- Be in a position to make an offer
Having loan finance pre-approved offers a number of advantages. It sets a clear borrowing limit, which helps you establish (and stick to) a buying budget. This is important when it comes to price negotiations as you know when there’s room to increase your offer, and when to walk away.
Pre-approval also demonstrates that you’re a serious buyer, and lets sellers enter price negotiations with peace of mind that your offer is unlikely to fall over due to finance.
- Keep your ear to the ground
In the current market, properties are being snapped up extremely quickly – in some cases before buyers have even had a chance to inspect the dwelling in-person. So allow time in your week to stay up to date with new listings.
If you don’t have time to monitor and research the market yourself, consider engaging a professional to do so on your behalf.
- Broaden your search
In a fast-moving market, and especially if you’re constrained by a budget, limiting your investment options to particular suburbs can significantly restrict your property search. It also means you may be missing out on opportunities elsewhere that are a better fit for your criteria and budget.
Partnering with a buyer’s agent can help you pinpoint properties that fit your wish-list in locations you may not have considered. They’ll also use their knowledge of the market, industry contacts and custom research to identify upcoming growth areas that may not be on your radar, but which are likely to benefit from strengthening conditions.
- Know how to make your offer more attractive to sellers
In a competitive market, multiple buyers may all be bidding at a similar price point. This makes it essential for your offer to stand out (for the right reasons).
Talk to the listing agent to know what matters to the seller. They may be looking for a short settlement. Adjusting your terms to meet this need might give you a winning edge.
This is where working with a buyer’s agent can provide a competitive advantage. They’ll be able to advise you on terms that could help you stand out based on the seller’s motivation, and identify terms that may work against you.
- Engage a professional
Increasingly, buyers are contacting us to leverage the advantages of a professional negotiator. As full-time property professionals, our buyer’s agents 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 our established network of selling agents, referral partners and private sellers
- Identify whether or not a property is investment-grade.
If you’d like to find out more about how our team could help you in your property search and negotiation, visit our website to organise an obligation-free consultation.