Insight

20.04.21  Buying Tips

 

7 Tips For Buying Real Estate In A Rising Market

Sydney’s property market is hot right now. Prices have already risen this year, and some commentators expect they’ll rise by close to 20% over 2021.

As a buyer in these conditions, it can seem as though every decent property gets sold before you have the opportunity to even see it - and often for far more than you were hoping to pay.

So, how do you buy when the market seems to be getting away? Here are our seven tips.

1. Be prepared

When the market is rising rapidly, speed becomes more important. If you see a property you like but then have to waste time organising finance or arranging a builder or architect to inspect the home, chances are it will be gone by the time you’re ready to make an offer.

Our advice is to get everything in place now, before you find a home you want to bid for or make an offer on. That means applying for a home loan through a lender or mortgage broker if you need finance. It also means lining up the professionals - such as a solicitor, pest inspector, architect or builder - who can give you the full picture on a property so that you’re ready to act.

2. Don’t rely on property portals

Websites like realestate.com.au and Domain are great for giving you an overview of properties on offer but they never tell the full story. In today’s market, a lot of properties never make it to the general public but instead get sold off-market. To get access to these, you really need to register with a real estate agent so they can let you know when they have a property that matches your criteria.

You should also make sure you don’t simply scroll through properties online but get out and physically look at them or do an online tour where you can’t. Don’t write off a home just based on a few pictures. Looking at a property’s online pictures doesn’t always give you an accurate view of how a property looks and feels.

3. Be realistic

One of the biggest obstacles we see to someone actually securing a home is that they have unrealistic expectations about what they can afford. If your budget is under $2 million, you shouldn’t expect a penthouse overlooking Bondi Beach, but you might grab a great apartment without water views.

Chances are that you may have to compromise about something in your property search. So work out what your non-negotiables are and what you can be flexible on. For instance, do you really need that fifth bedroom if you’re in the perfect location? Does it matter that there’s no third toilet?

Also, use your vision and think of what might be with any property - don’t limit your thoughts to what’s in front of you. A lot of buyers reject homes over things that could easily be fixed such as a colour scheme they don’t like or an awkward kitchen layout.

4. Act decisively

Buying in a market like this one is about confidence. You need to trust that you’re making the right decision. That means doing your research, working out what the property is worth, and also figuring out the opportunity cost involved in not buying now. What would happen if you miss out and prices rise further still? On a $3 million home, just a five per cent rise equates to another $150,000. In these circumstances, it often pays to be flexible over $10,000 or $20,000.

5. Buy first, sell second

When prices are rising it’s often a good idea to buy before you sell if you’re upgrading or downsizing. That way you’ll know you’ve secured your new home before the market gets away from you. It also means you can take advantage of any future price rises. If you’re worried about paying for bridging finance, try to get an extended settlement period on the home you’re buying. That way you could be able to time your sale and purchase simultaneously.

6. Use a buyer’s agent

A good buyers agent can sometimes make a big difference in a hot property market like this one. That’s because they’ll know the real value of a home based on the latest data, as well as the techniques for making sure they secure it. They also have established relationships with agents and sometimes get notice of properties before other buyers get to see them.

7. Keep your head

Finally, it’s worth remembering that even in a strong market, it pays to keep your head. Always do a cost/benefit analysis before you buy and make sure you don’t spend more than you can afford. After all, even if your property’s value rises, you’ll still need to make your monthly mortgage repayments.

Want more?

If you’d like advice on buying or selling in today’s market, get in touch.

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