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Kicking tyres is bad for your feet.

Friday 7th Jun 2019

Kicking tyres is bad for your feet.

With interest rates hitting record lows this week and the election result now decided, I feel compelled to write an open letter to buyers who have been looking for too long (that means 6 months or more).
 
Now that market conditions have noticeably improved we are seeing a new wave of buyers coming, so if you don’t focus on acting I fear your woes will remain, and you will continue to deprive your friends and family of your presence.
 
To keep it nice and simple here are my 5 top tips on how to be a good buyer and live happily ever after.
 
Tip 1 – Choose an Area:
 
Prices across Sydney’s suburbs vary so much that if you are looking at multiple suburbs it’s highly likely that your perception of value is skewed – choose an area and stick to it. I shudder when people say to me ‘we are looking at houses in Mosman but would also consider Balmain, or if we saw a really nice property in Orange we would consider that’. The best buyers become an expert on a particular area and when the right home comes up, they know exactly what to offer. Conversely, it is often the ‘out of area’ buyer who overpays because they don’t understand the nuances of a particular suburb. I have seen many frustrated Eastern Suburbs’ buyers cross the bridge and then overpay for a suboptimal property in Mosman because they thought it seemed like a good deal…It wasn’t.
 
Tip 2 – Line up the ducks:
 
Get your finance arranged, choose a good local conveyancer/solicitor (the best will let you contact them after hours), and be ready. Sadly, many people go out looking first, find the home of their dreams and get rolled by another buyer that is prepared. I wouldn’t be surprised if the tight market conditions we see now last for years, so that means if you miss a good property it could be a long time before another one comes up.
 
Tip 3 – Get real:
 
My mum often says, ‘since we came to Australia in the early 80s property in Sydney has always been expensive, even when the market is down.’ Re-read that. During the GFC, Y2K, September 11, there were no cheap houses in good parts of Sydney. More people want to live here than want to leave, people who own good homes tend to like keeping them, so it stands to reason that if a good property comes onto the market you are not the only buyer. Get with the program and be prepared to pay up. Trust me, after a few months you don’t look at your mortgage statements.
 
Tip 4 – Offer the most:
 
This may seem revelatory but in most cases the person who gets the property is the one who offered the most. If a property has an asking price or a range and you want it, and can afford it, then pay it. If the property is going to auction then refer to points 1, 2 & 3 and then set a realistic and competitive limit to bid to. Also, a bonus tip is if you are buying at auction set a limit and then bid like a crazy person within that limit…Why? You may just convince your competition that you aren’t going to stop. If they bid $5,000, you bid $50,000 (within your limit of course!).
 
Tip 5 – Consider hiring a professional:
 
I’m a little torn about this one, some buyers agents are good and some are useless. In most cases I don’t think people actually need a buyers agent, but if you are time poor or are prone to procrastination then having a professional in your corner may just help you to buy. You see that’s the point, in most cases even buying a property that isn’t perfect is better than not buying one at all. Over time real estate has a habit of going up in value, and when you rent you are paying off someone else’s mortgage.

That’s it for this week. I hope that you have a wonderful long weekend and register for Mini-Mos which is next Sunday.
 
Until next week,
 
David Murphy
 
P.S. Tip #6 is support your local community…It’s good for your karma.