If you’re one of the many first home buyers feeling disheartened by the current outlook for real estate, here’s how to navigate buying in a hot market.
It’s clear to see that these unprecedented times have contributed significantly to an unparalleled real estate market. Industry experts have indicated that record low interest rates, a change in spending habits and swarms of Australians relocating as a means to escape lockdowns have all heavily contributed to the current boom, with demand far exceeding supply in many corners of our great nation.
While this seems like good news if you are considering selling property, with the way the market is at the moment, it is posing difficulty for those who are trying to tackle buying in this hot market. When it comes to the property outlook around Australia, time on the market seems to be low, settlement turnaround times faster, and auction clearing rates high. On top of this, properties are skyrocketing in price, with Brisbane alone seeing an 18.5% increase in September 2021 when compared to the same time last year.
Many first home buyers have already done the hard yards when it comes to meticulously saving enough cash for their deposit, curbing their living expenses, and getting all their ducks in a row to be ready to purchase a home, only to be outpriced or not quick enough to make serious offers. However, it’s not all doom and gloom, and there are still many tactics to deploy if you’re buying in a hot market.
Five Tips For Buying In A Hot Market
What we refer to as a ‘hot’ market is when there are too many buyers competing over a limited amount of properties for sale, or properties that are selling at prices far higher than they once would have just a short time ago. Key indicators of a hot marketplace can also include the median average price of homes rising in a particular suburb, less real estate advertising, and even properties that go live on the likes of RealEstate.com.au with ‘under offer’ banners already listed.
While buying in a hot market can bend the traditional rules of how real estate works, there are still a few secret weapons that first home buyers can deploy as a means to get into their first home faster while sticking to their budget.
Get A Pre-Approval – The golden rule of buying in a hot market is to have your financials as organised as you possibly can. When there’s 20+ people competing over the same property, many real estate agents are actually ignoring offers from those who don’t have proof that they are armed with a pre-approval from a lending institute.
Prepare To Compromise – Many first home buyers make the mistake of approaching their first property purchase with rose tinted glasses, and get disheartened if they can’t find their ‘forever’ home. Instead, approach the task as an investment and be realistic on things like suburbs, the aesthetics of a property, and think pragmatically like a property baron would.
Be Aggressive – Dithering and ‘umming and aahing’ in a hot market will not do you any favours. Instead, make offers confidently and quickly to show that you’re a serious bidder to avoid missing out. It’s also worth getting to know the real estate agent as well as you can to ensure you are a memorable candidate – even a gifted bottle of scotch doesn’t go astray.
Simplify The Process – When buying in a hot market, always remember that most sellers are looking for the highest price with the fastest turnaround time, and can view certain contract contingencies such as inspections and finance clauses as potential reasons for the deal to fall through. As such, try to minimise your clauses to the essentials whenever possible.
Stick To Your Budget – It’s the role of a real estate agent to favour their seller, not the buyer. Beware of pushy sales tactics that are ultimately there to drive the property’s price up, and don’t fall victim to panic buying. While there’s plenty of things to compromise on, one thing buyers should not budge on is their budget. This will save them from over committing in the long term.
Now more than ever, it’s important to do your research when it comes to navigating how real estate works in Australia. With some of the more prominent lending institutes such as Macquarie Bank and the Commonwealth Bank approving home loans in under two business days, it’s worth partnering with a reputable mortgage broker to help you make the most of the current interest rates, terms and ultimately finding a pre-approval that’s best suited to you and your lifestyle.
Securing A Pre-Approval With The Professionals
Getting preapproved for a home loan has long been regarded as stressful, frustrating and time consuming – but the good news is that it doesn’t have to be.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 2,000 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.