In some parts of Australia, conditions are shifting to create a buyer’s market, so it’s time for purchasers to get smart.
A buyer’s market – where there’s more homes for sale than buyers – demands specific buying tactics and using them can be the difference between snagging a bargain and paying over.
Generally speaking, in a buyer’s market it’s best to buy at auction – and even more than usual, knowledge is power when it comes to negotiating, as is the right approach.
A buyer’s market is also a great time to use a professional negotiator, like a buyers’ agent, as sellers will be going hard for every cent.
Buy at auction
In a buyer’s market, selling agents will look to do a deal before auction, because they know there aren’t many buyers around. But as a purchaser, an auction is better, May explains.
“It’s generally better to go to auction, as there is the transparency there and you won’t get taken for a ride by the selling agent,” she says. Never put in an offer without due diligence, though.
Use a buyers’ agent
It’s easy for buyers to be over-confident when they know they’re theoretically in a position of power. This can be a pitfall, May says.
Real estate agents sell properties every day of the week and have the skills to make buyers pay more than they want, making it an uneven transaction.
“By using a skilled and experienced buyers’ agent, you can be confident you’re going to be paying the right price and walk away from the wrong property,’ May says.
Be Armed With Knowledge
Whether it’s at auction or not, use comparable sales to work out what the vendor will possibly agree to take, May says. Discuss the comparable sales with the agent.
“Talk to the agent and ask them lots of questions. The more you talk with them, the more information you may be able to find out that can work in your advantage. But also, be sure not to give too much away yourself!” she says.
Don’t be Adversarial
Being combative while negotiating will only put the agent off, May advises.
“While you can talk about property defects, the cost of rectification, etc. to negotiate down the price expectations, there’s no need to be rude or over the top. You want to stay on the agent’s good side, while still standing your ground.”
Talk Numbers at the Tight Time
Buyers should only talk numbers if they’re ready to make an offer. “Make sure your due diligence has been completed before giving the agent a figure,” May says.
“When you’re ready to make an offer, make it as easy as possible for the vendor to accept: have the contract changes agreed to; have a cheque; have your pre-approval in place; waive the cooling-off period; signed contract. Then add a deadline.”