It’s scary out there for first home buyers!
Helping Jessica to buy her first home was particularly rewarding for me. She was about the same age I was when I bought my first apartment, so I could easily identify with the excitement she felt about the big step she was about to take. She had caring parents who were there to support her every step of the way and yet there was something blocking them when it came to the crunch.
The Perth market was just starting to heat up and as often happens, the most competitive market segment was at entry level. Both first time buyers and investors were competing in the same space and this meant that open houses were crowded and frenetic, with offers often being thrown at agents by numerous buyers at the first inspection. It was understandable then that Jessica and Karen were being scared off property by the sheer weight of numbers at open houses and the speed at which people were making offers. They were easily put off by those who seem to be more aggressive or have a bigger budget. Add to this that it all seemed so fast and they weren’t being given any time to properly consider this most important purchase.
I have to confess that even I can experience a similar reaction at a packed open house. So it is no surprise that anybody who does not do what I do for a living could be completely put off buying at all. And even if you aren’t deterred by all the other clamoring buyers, when new listings are selling in their first weekend, you don’t have time to second guess yourself. It’s uncomfortable to feel pressured to make decisions without being able to take enough time to properly consider the property.
It’s a double edged sword, do you make a snap decision in order to secure a property but run the risk of buying something that you regret? Or do you take your time to think it over and take the risk that another buyer acts so fast that it’s gone before you know whether or not you want it?
There are a few things you can do to beat other buyers in a hot market:
- Hire a buyers agent to give you not only a time and tactical advantage but for quality advice on property selection so you can quickly make a wise decision.
- Look at as much property in your price bracket as you can so that you are well educated in terms of both values and what characteristics a good property has versus a dud.
- Get to now the active agents in your area. Be friendly to them and engage in conversation if possible so they will remember you. This may surprise you but they often have “favorite” buyers and this may give you an inside edge.
- Set up database alerts on both domain.com.au and the active local agent websites. They often email their database before new listings go live online.
- Look for overpriced listings. Just because it’s been on the market a while doesn’t necessarily mean anything is wrong with the property. But if it priced too high buyers tend not to even inspect it. If you know values and are prepared to make a low offer, you might find that you can negotiate a deal without competition from other buyers.
- Auctions can be your friend. Not only are they a transparent sales process but a property with an auction campaign is not as likely to sell after only one open house. Then you have more time to do your due diligence and you may still choose to submit a pre auction offer.
And the final word: don’t give up. Remain positive and keep a handle on value and sale prices and you will end up getting your dream home without buying a lemon or paying too much.