Buying in a Rising Market - By Susan Wellings and Monica van Riet - Mortgage Choice South Melbourne

Whilst enjoying my coffee and perusing through the Domain section of The Age on Saturday the 8th of November, I came across a great article which I thought would be very helpful for our Home Buyers who have been struggling to secure a property, or whom have just had their Pre Approval organised.

We’re finding a lot of our home buyers are often missing out on the homes they have their heart set on, and it’s taking far longer than they originally thought it would. The key is in the preparation and education I say. So are you stuck in a rut and struggling to find your dream home? Perhaps it’s time to reassess, reconsider what is important to you, go through the tips below and hit the ground running second time around.

Good luck! Mon.

 

Buying in a rising market, especially if it’s your first time, requires a military-like strategy and persistence. You WILL succeed – and the experts offer some tips.

If you've just missed out on the home you'd set your heart on - as well as perhaps two or three before - don't despair. Even though the market's pretty hot, the worst thing you can do is give up looking, say the experts.

"Of course you're disappointed if you lose out, but you just have to tell yourself that maybe it was meant to be," says Ivan Bresic of sales agency BresicWhitney.

"I've known so many people over the years who might take another month or three or six months to buy something else, but they all invariably say they're glad they missed out that other time; they love the one they're successful with so much more," Bresic says.

So you just have to keep on looking, and be ready for the next opportunity."

Doing your research in the interim is vital. If you don't know how much a property is likely to be worth - regardless of how much an agent is quoting - you could end up going to auctions completely unprepared. 

"And that would be a real waste of both your time and your money," says Simon Cohen of buyers agents CohenHandler, who also recommends, naturally, engaging a buyer's agent to help with the purchase.

"But it's important to know how much a property is worth and know whether it's inside your budget. And try never to get emotionally attached to a property that you want to buy. That's very dangerous as you could easily then end up paying too much." 

Yet this is still one of the best times to buy too, because of the low interest rates and the sheer quantity - and choice - of houses and apartments on the market.

It's worth being proactive to increase your chances next time. Email agents and tell them what you are looking for, and ask them to be put on their mailing lists.

Also, try to look outside the square. Be more flexible. "Look in a neighbouring suburb to the one you originally wanted," suggests Trudy Biggin of Biggin & Scott.

Other tactics could include leafletting a building in which you've missed out on an apartment to ask other owners if they'd consider selling, or in the same street where someone else nabbed the house you wanted.

Instead of risking missing out at another auction, consider making a pre-auction offer. Cohen says for a home under $1.5 million, he'd always try to avoid going to auction. Some agents advise that an offer should be about 5 per cent above the price the seller is offering it for, to make it worth their while skipping the auction.

Just don't be tempted to give up completely and go back to renting. Work out what you could compromise on.

Dr Andrew Wilson, senior economist at Australian Property Monitors, believes the current strong prices growth in Sydney is likely to flatten out by the middle of next year. But even if it does, prices will be higher than they are now, he says.

"But however you're going, always make sure you have a few different options," says Bresic. "Don't put all your hopes and dreams onto the one property.

"Keep your options open and eventually you will be successful - and happy with your final result."

Work out exactly what you want - and what you will compromise on

Flat Chat's Jimmy Thomson recommends making a NEED-WANT-LIKE list to stay absolutely focused on the properties that are worth pursuing - and, if you miss out on your perfect home, to know what kind of compromises you might find the most palatable.

First write down all the areas where you want to buy, and the highest price you can realistically afford.

"Then write down your NEEDs, all the things you feel you can't live without," says Thomson, the author of The Ultimate Guide to Buying and Renting Houses & Apartments.

"Include things without which your life won't make sense ... whatever is absolutely essential goes in here.

"Then you put in the things you really WANT like maybe a garden, a balcony, or secure parking. These are things that, for you, are highly desirable but ultimately negotiable."

Next, he tells prospective buyers to write down their LIKES such as a swimming pool, a view, a huge kitchen. These are "icing on the cake" items.

"Then, when you start your next search, be absolutely ruthless. Only properties that tick every box in the NEED list should be looked at.

"Next, whichever of those properties tick the most boxes in your WANT list you should look at first.

"And if you find two or more have the same number of ticks in the first two lists, that's when your LIKE list kicks in. That's the tie-breaker, and shows you exactly where you need to focus all your energies."

Posted in: Property market

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