Some homeowners have become more motivated to sell their properties, with record volumes of auctions going ahead in recent weeks as sellers try to ink deals before interest rates rise, the federal election goes ahead or home price growth softens.
Although it is not quite a buyer’s market, keen sellers of B-grade homes and over-supplied areas are the first to come to the table, offering opportunities to potential purchasers.
Strategies such as getting finance approved early and understanding a vendor’s motivations can help buyers get their foot in the door.
Sydney and Melbourne recorded their highest auction volume for the second and third weeks of February, compared to corresponding Saturdays in previous years, and this weekend just gone also had strong volumes of 965 auctions held in Sydney and 1288 in Melbourne, giving buyers more choice.
Melbourne-based Hunter Advocates director and buyers agent Narelle Glynn said buyers needed to ask the right questions before trying to negotiate a sale.
“I think sellers are getting a little more motivated,” Ms Glynn said. “But that being said, the good properties are still going, and they’re going fast.”
She said those wanting to make an offer before an auction should get to know the vendor’s motivations for selling through the agent.
“They should find out as much as they can about the property itself and the vendor as well,” she said.
Ms Glynn advised buyers to ask lots of questions about the level of interest on the property, why the vendor is selling, such as because they have already bought somewhere else, and whether they will entertain offers before an auction.
“Some people pounce on the property when it is passed in and negotiate the price,” she said.
Vendors would be more willing to consider reasonable offers if there was not a lot of interest in the property after it had been advertised for a few weeks, she said.
Chamberlain Property Advocates Wendy Chamberlain said vendors were becoming more realistic about the price they could get and were more willing to sell as interest rate rises loomed.
“I think it [also] comes down to some degree, to the vendor’s personal circumstances,” Ms Chamberlain said. ” If they’ve bought somewhere else then obviously they will be more motivated to sell quicker.”
She said vendors were less likely to take offers that came with conditions attached like subject to finance clauses and advised buyers to have their finances in order before making an offer.
Ms Chamberlain also recommended making an offer in the “sweet spot” in Victoria – three days before an auction when offers became unconditional.
“Sometimes they’ll want to wait until the Wednesday before an auction because offers become unconditional and buyers cannot cool off [and change their minds],” she said.
“I would suggest you talk to the agent about making one in the non-cool off period,” she added. “Just keep checking in to see if the mood or climate changes and where the vendor is and see where the level of interest lies.”
In Sydney, buyers are more likely to come across motivated sellers in over-supplied markets or owners of B-grade properties rather than the most sought-after homes, with the first tell-tale sign being a shorter settlement period, Michelle May of Michelle May Buyer’s Agents said.
“Typically it’s a 42-day settlement that could be 35 days instead,” Ms May said. “But really it could also be if it’s an investment property, and it’s been empty for a while, you can look those things up, or even ask the agent.”
Ms May said vendors of vacant properties are more open to offers because their assets will be costing them money if still mortgaged.
Once buyers have determined the owner is motivated to sell, they need to have all their ducks in a row because time is key.
“When buyers smell an opportunity they get things muddled up. They think they are in a position of power … whereas in this market vendors have multiple buyers, so you still have to be strategic. Don’t start talking numbers unless you’re 100 per cent sure you can seal the deal,” she said.
While it was still firmly a seller’s market, she said there were segments of the market where that dynamic was changing and buyers needed to watch for the level of supply in the area or the quality and type of property they were buying.
“It’s always been a buyer’s market on sub-par properties or where there is a high supply of properties such as apartments. That’s when buyers have more power.”
Cameron Porter, principal buyer’s agent at Porters House, said motivated sellers seem to dominate the apartment market while there is still strong demand for good-quality, freestanding houses.
“I am starting to see more properties that have been a poor investment decision, an investment that has been underperforming properties, and they’re selling it to first-home buyers,” Mr Porter said.“It’s the properties that aren’t as good, properties on busy roads, some of those people are going to sell out of them now and move to a more desirable location.”
Article Source: www.brisbanetimes.com.au