BUYING IN A RISING MARKET – WHEN PROPERTIES ARE BEING SOLD WELL ABOVE THE LISTED PRICE RANGE
The challenge with buying property in a rising market is to keep pace with the market and to adjust your buying strategy accordingly, and if necessary, quickly.
It’s not helped by the fact that in Victoria, when selling agents recommend the auction method to their vendors, the campaign inevitably starts off with either no disclosed price or bait pricing. This is where the campaign pricing starts low and then increases each week according to ‘buyer’ feedback.
The only way to combat this is to know the suburb and pricing in which you are buying and to keep an eye on the difference between the starting price and the inevitable selling prices. What is the % increase on average each time and then use that as a means to gauge the ‘real’ price.
Bare in mind that this isn’t a guarantee that prices won’t keep going up if supply outweighs demand, but at least you won’t waste time looking at property that just isn’t in your reach.
Miriam's Top 4 Tips for Buyers
1. Do your research and get to know the marketplace. Know the suburb and understand what the type of property you want is selling for. It’s not about what prices they are advertised at, but what they are actually selling for. This is the reality check to go by, so that when you see a property advertised, you already know what the ‘real’ market value is based on recent sales evidence. Register on www.realestateview.com.au/soldtoday for the latest sales results updates each weekend.
2. Know how the pricing rules that the agents have to abide by. If you are up with the rules of the ‘game’ then agents are less likely to underquote if they know they are dealing with savvy buyers. Visit www.propertymavens.com.au to access a selection of free buyer resources including Consumer Affairs Victoria Property Pricing Guidelines for Selling Agents and A Guide for Buyers and Sellers plus Miriam's ‘Property Buyers Guide – The 7 Common Mistakes Property Investors Make’.
3. If it is apparent that you are in a rising market and hopes of obtaining your dream home are disappearing fast, then reassess your position as its time for a reality check. If you must, what one thing would you be prepared to change to still secure your home? Can you;
- increase your budget
- move to a nearby suburb
- buy a smaller property on smaller size land or
- buy a lesser quality property (where you could add value via cosmetic or structural renovation)
By being prepared to move on just one of these 4 things, you will likely achieve your result.
4. Remember, even if you are buying a home to live in and not an investment property, make sure it still stacks up as a good investment regardless. You may need to rely on its potential for capital growth to continue to invest in the future and of course, not all properties grow at the same rate!
Best of success!
At Property Mavens, it is our mission to find and buy you properties that outperform the rest. Miriam Sandkuhler is an Acquisitions Specialist at Property Mavens. Qualified as an Accredited Property Investment Advisor, with a Diploma of Property and a Diploma of Business Studies, Miriam’s experiences in business and as a Licensed Estate Agent have given her the edge in sourcing and negotiating great deals on behalf of her clients.
For more information on how Miriam can help you find and evaluate a great property and to receive a free copy of the e-Book, ‘Property Buyers Guide – The 7 Common Mistakes Property Investors Make’ visit www.propertymavens.com.au or you can contact Miriam directly on 03 9988 2266 or by email to firstname.lastname@example.org