When property market conditions favour sellers, buyers need to engage some smart strategies. Here are four ways to gain entry into a hot housing market.
One of the fundamental rules of investing in the housing market is to buy when prices are low and sell when prices are high. But life isn’t always that clear cut and property predictions don’t always eventuate. If you’ve saved a deposit, or you’re keen to grow an investment portfolio, it can make sense to snap up a property now – before the housing market forecasts a rapid increase in prices. But it does call for smart thinking. Here are four strategies to help you get ahead of the competition and secure your place in the housing market.
1. Be ready to enter the property market… fast!
When housing market predictions of price hikes seem to be coming true, it’s vital to have everything in place so that you can make – and act on – an offer when you find a suitable property.
One of the greatest home buying myths is that you don’t need to worry about pre-approval until after you buy. Make sure you have loan pre-approval organised and a team of experts ready to act on your behalf, including a solicitor or conveyancer and building inspector.
2. Get ahead of your competitors
When experts in the property market forecast a forthcoming rise in prices, don’t just sit back and rely on publicly available advertising to locate your dream home. Pre-empt the market by speaking with agents in the area you wish to buy. Explain what type of property you’re looking for and your buying budget, and leave contact details. It can mean snaring a property before it’s openly marketed.
If your ideal property is going up for auction, consider making a pre-auction offer, though do your homework to determine an accurate property value and give yourself some negotiating space on the price.
3. Make an early offer
Putting any offers in writing – accompanied by a cheque for the deposit – dangle a very tempting bait in front of the vendor (and listing agent) and shows everyone you’re serious and able to act immediately.
Suggesting a shorter settlement period – if you can manage it, can make your offer even harder to resist. Another one of those common home buying myths is that the highest offer always wins. In fact, if a quick settlement works for the vendor, you might edge out any competitors who can offer more but only at a later date.
4. Remember the essentials
No matter how hot the property market is, or how dire property predictions might be, there are some issues you should never compromise on.
- Always arrange a pre-purchase inspection. It’s better to miss out on a property today than be lumbered with a lemon indefinitely.
- Stick to your buying budget. If you’re continually being beaten on price, look to neighbouring suburbs where the average property value may be more reasonable.
- Seek expert with your home loan. Getting a good deal on your mortgage can reduce the long-term cost of the loan, making the overall cost of your home more affordable.
Finally, be wary of properties listed at the very low end of the price spectrum – even in a heated housing market. There’s often a reason why they linger longer in the property listings. A ‘renovators delight’, for instance, may seem like a good buying opportunity, but don’t underestimate the effort and cost of restoring rundown properties to their true glory.
Are you planning on entering the property market in the next few months? If you are, please share your reasons in the comments below, as we’d love to know.
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