What does the property market look like for us, our clients and those looking to buy a home?
Well at the risk of having you read ‘unprecedented’ for the hundredth time today… it’s safe to say that the current landscape is certainly not something we have experienced before, nor is it something we could ever plan for. We have been in close contact with real estate agencies we work with on a regular basis, and they all have their take on the current market. Like most other things in Australia at the moment, a lot of the details are up in the air. For now, here is what we know is happening in the property jungle:
Open For Inspections
- All opens to be by appointment only and no advertised open times
- You are required wear gloves if you wish to touch anything, open doors etc.
- Virtual walk throughs are happening, with agents FaceTiming us to show new properties, particularly off-markets
Throughout Melbourne’s South East where we purchase majority of our properties, agents generally run a four week auction campaign. This past week, we have been contacted by multiple agencies who are moving their auctions forward, some as immediately as that night. The key repercussion of this is that it doesn’t give people a lot of time to prepare.
However, after last nights update, auctions have been banned and all campaigns have been switched to either an “Expression of Interest” (EOI), “Private Sale” or “Off Market”.
How does this change the way we buy?
As buyers advocates, it doesn’t change a lot. We purchase property via these methods every week, so the adjustment is minimal and quite normal for us.
Here’s a bit more on how these sales method differ…
Expression of Interest (EOI)
The agent and the seller will set a date they are accepting offers until, which is when you need to submit in writing your best and final offer. There is no going back and forth, so if you submit an offer of $800,000 for a 60 day settlement and the agent comes back to you saying, “sorry someone has submitted a higher offer with a shorter settlement” there is no round two.
The key point here is to make sure the number you come up with is genuinely your walk away price, with the understanding that you will not have a second chance.
The main difference here is there can be a bit of negotiating between parties, but generally the first buyer to submit an offer holds all the power.
This is how it would work if you’re the first to submit an offer:
The agent takes the offer to the seller and asks them if it’s acceptable. If it is, the agent will notify anyone who has shown interest that they have received an acceptable offer and the property will be sold by 12.00pm tomorrow. This gives all interested parties time to submit their best and final offer.
Now this is where the advantage of being first in come into effect: if your offer is beaten by another buyer, you have the opportunity to better your offer which no one else can do. Hopefully you can get an indication from the agent of where the offer needs to be to help with the decision of upping the amount or walking away.
Timing is crucial at the moment and if you’re looking at getting into the market, you need to make sure you are ready to purchase.
- Have your pre-approval sorted and speak to your broker about the possibility of submitting an offer. They need to know what is coming if you’re lucky enough to secure it.
- If you like a property or have some sort of interest, let the agent know. At the moment this can be done via phone call, asking if you can be notified on any updates.
- Get your experts primed and ready to go. These would include your mortgage broker, a conveyancer/solicitor and a building inspector at minimum. If they are aware you are considering a property, it won’t be such rush to get the property looked at.
Now this is a big one. Please please please, don’t get sucked into this common mistake people make. I know it’s hard, especially when we think the world is ending, but do your research, check out what other properties have sold for recently and set your limit! No matter how nice an agent comes across, they work for the seller and their job is to get every extra dollar they can for their client.
If you want to have a chat about property or find out more on what’s happening in the market currently, please feel free to contact me anytime on 0413721164 or email firstname.lastname@example.org. Otherwise, you can get in touch here.