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An endemic lack of stock around the country means investors are at risk of paying premium prices for ordinary properties. If you’re an investor in the market today and even one of these scenarios below has crossed your mind, you should probably be using a buyer’s agent for your next property.
1. You worry you’ll over-pay for the property you buy, or have to wait extended periods for something suitable
Real Estate Buyer’s Agents Association of Australia (REBAA) member in NSW, Amanda Segers, says many home buyers are having to compromise on price or are experiencing long delays.
“Buyers are faced with open homes filled with crowds of other buyers and their tape measures,” she said.
“Without the luxury of inspecting a home without the crowds it’s pretty disheartening for the regular home buyer.”
2. You feel pressure could see you making poor purchasing decisions
REBAA Newcastle member, Tiron Manning, says some buyers are being pressured into signing unconditional contracts because they don’t have the time to do adequate due diligence.
“Or,” he said, “they’re simply relying on reports supplied by the vendor.”
3. You are concerned about missing out
REBAA ACT member Claire Corby said supply is down and demand is up “big time” in Canberra.
“Auctions are exceeding expectations in a growing number of suburbs,” she said, “with more emotions on display as buyers try to compete for the new quality homes on offer.”
4. You are anxious about buying a property that isn’t on the top of your list
REBAA Queensland member, Stephen McGee, said the shortage of good properties in all areas across Brisbane was compelling home buyers to pay top dollar for houses that probably wouldn’t be top of their list.
“As a consequence selling agents are then reluctant to market their property without a price, leading to an ‘auction’ or ‘for sale by negotiation’,” he said.
“This then leaves the buyer at the mercy and persuasion of the selling agent and online valuations to determine what the house is worth.”
5. You are concerned about overbidding at auction
Particularly in the lifestyle locations of the Gold Coast and Byron Bay, lack of quality stock is frustrating buyers into overbidding.
“The Byron Shire market is so heated that anything good that is listed at fair value has a number of competitive bidders,” said REBAA Byron Bay member Michael Murray.
“Once I know a property is fair value I offer full price, get it off the market and then exchange as soon as possible.
“The ability to recognise value early is key.”
6. You’ve considered the risks of buying before you sell
In Melbourne the stock shortage is being fuelled by upgraders opting to buy before they sell, to avoid their equity being devalued in a rising market.
“Unfortunately it’s a bit of a ‘chicken and egg’ phenomenon right now, says REBAA Victoria member, Cate Bakos, “as stock shortage is precluding these upgraders from securing their next home and subsequently selling.”
7. You worry about not being able to recognising fair value
The challenge in Tasmania, according to REBAA Tasmania member, Rob Zubin, is for buyers to find a way to be competitive “without paying way over the mark”.
8. You recognise the value of having early access to good property assets
REBAA NSW member Sebastian James said with buyer’s agents the pricing is always driven by comparable sales and not by the “fear and emotion” experienced in the majority of property transactions.
“As a business off-market and pre-market purchases now account for more than 50 per cent of property we have secured for clients this year,” said Mr James.
Mr James estimates the amount of good quality stock in Sydney is down around 40 per cent compared with this time last year.