Get a handle on fluctuations
THERE ARE OPPORTUNITIES TO BE FOUND IN A BUYERS’ OR SELLERS’ MARKET Getting a pre-qualification for a loan puts you in a good position to negotiate.
With the weak economic outlook persisting, we can expect the current buyer’s market phase to last until well into next year, but what does this mean for buyers and sellers?
When the economy and property market is in a positive growth phase, buyer demand tends to be high, with loads of competition for properties. Sellers can generally call their prices; buyers will pay higher prices to get their hands on their dream property.
When the economy and property market goes into decline, there are usually fewer buyers while the number of properties listed on the market increases. Buyers can usually call the prices. With the economy and property market in decline, we are firmly in a buyers’ market. But there are opportunities in every market.
The most important thing is that your asking price needs to match the market. If it’s too high, you’ll scare off potential buyers. It doesn’t mean you have to sell cheap. Far from it.
A serious buyer will put a serious offer on the table, but they’ll be aware of the market conditions and current selling prices.
Guard against giving a mandate to an agent on the basis that they can get you a high price. Before you agree, ask for a comparative market analysis and ensure they include the last five sales in the area so you can see what has sold and for how much.
If the recommended price is too low, your best advice might be to take your property off the market until it improves. This means you’re in a fairly good negotiating position, but it doesn’t mean sellers will be open to bargain hunting. Sellers will still expect to receive a fair price for their property.
If you’re keen on a property put in a serious, but not overpriced, offer. Leave room to negotiate, but don’t take too big a risk. A good property at a fair price will always attract buyers regardless of the state of the market, especially in high demand areas.
Get a pre-qualification done if you require a home loan. Then you can shop around knowing you’re in a good position to negotiate. If you’re able to put down a reasonable cash deposit, you’ll be in an even better bargaining position.
If you find a property that you really like and it is well priced, secure it while the market is down, because it is almost impossible to predict what the market will do next.