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Lunch is for wimps

Friday 18th Oct 2019

In a normal market, a huge part of my job is managing owners expectations around what is a realistic price for their home. The ‘endowment effect’ makes it nearly impossible for us humans to value our beloved homes objectively. They are the sets and stages of our lives: love, tragedy, deaths and births all happen inside those four walls and letting go of that is truly one of the hardest things to endure. It’s not just the memories, moving home punctualises the different stages of our lives…heavy stuff huh?

 

But this is no normal market…

 

In the past 8-10 weeks, the local property market has gone into hyperdrive and now a huge part of my job is trying to help buyers to jump onto a moving train. A hot market is a brutal place. Emotionally moving into a property before you buy it creates real heartbreak. We had a sizzling auction last Saturday and got a record price for our sellers, but as the applause broke out I couldn’t help but feel sad for the underbidders who were literally shocked at the fierce bidding that had just erupted around them. 

 

So if you are a serious buyer, here are my 3 hot tips for you:

  • Increase your budget or downgrade your requirements. If you have been outbid on more than one property you are behind the market. It doesn't matter what the house around the corner sold for, it’s sold. If you are buying to hold long term, then stop thinking short term.
  • Get a good solicitor/conveyancer that is easy to contact even after hours. In this market, if you are using the same lawyer your parents did because they are a nice person but they play golf 3 days a week, they will contribute to you missing out on properties.
  • Don’t haggle. If you have a cool friend in investment banking who calls a million dollars a ‘buck’ giving you buying advice, get a new advisor. Changing almost meaningless terms in a contract, reducing deposit amounts, or putting deadlines on offers make the owner think you have watched Wall Street one too many times (good movie though), and they will often prefer the nicer buyer.

 

History has shown us that the property market has a tendency to rise, but how long will it last? No one knows. If you want to buy, you have the option to pay a high price with record low interest rates, or wait/pray that rates go up and prices may come down…do the numbers…sort of works out the same.


Until next week,

David Murphy