December is prime time to buy property at a distressed rate, but there are some steps property investors should put in place to make sure they can get a deal over the line on their terms.
Many property investors believe you make money when you buy, not when you sell – meaning your biggest opportunity for capital gains is to buy at below market value, and hold.
Vendors are under time pressure during the Christmas season if they want to secure a buyer by year-end. During December, all parties to a property transaction – like real estate agents, conveyancers and mortgage brokers – are keen to be done and dusted halfway through the month.
This time pressure is a powerful negotiator for buyers who are willing to hold their nerve, and battle through shut-down season to secure a property. It’s these buyers a vendor is typically looking for during December. Properties are rarely put on the market at the end of the year with anticipation of a few months on the market, because they’d be paying for listings at a quiet time when most buyers retreat.
For CEO of the Buyer’s Agent Institute Ben Handler, now is an opportune time to go bargain hunting, particularly given softening conditions in capital city markets, but there are some key items investors should have ready to go before tackling the market:
“I make sure that my broker and my conveyancer are locked in, and contactable if the process blows out to the latter half of December,” Mr Handler said.
“Most importantly, the conveyancer I’m dealing with needs to be someone who is present. I don’t want to work with someone who is flying away,” he said.
“I also make sure offices will be open and people will be around to get my building, pest and strata reports,” he said.
“Pre-approval, of course,” Mr Handler said. “You don’t want to be starting this process in December, you want it done by December. Banks especially have slower processing times over the December period, I always have that sorted in advance,” he said.
“Using the cooling off period strategically can be a good tactic,” Mr Handler said.
“If there’s competition for the property, and you’re in a position to cut your cooling off period, that would be appealing to someone trying to offload their property before the new year,” Mr Handler said.
“If you’re the only buyer, and you want to extend the cooling off period, you could be in a good position to push for that to make sure you’ve got everything sorted on your end,” he said.
“In NSW, the 66W is a really good way to go to lock in a property; it’s a really good tactic for the end of the year – cutting the cooling off period when everyone just wants to close the book is very appealing,” he said.
“Real estate agents don’t work for you… so don’t ever let them pressure you into cutting corners on a purchase so they can close up,” said Mr Handler.
“A strata report is mandatory, reviewing a contract is non-negotiable, whether they’re taking longer because of Christmas or not,” he said.