WITH the limited supply of houses that defined last year’s market in Melbourne tipped to continue, it is set to be another tough year for those looking to buy.
While a smaller number of properties means increased competition between buyers, there are certain steps that can be taken to increase the chance of securing a dream property.
According to Harcourts Victoria chief executive Sadhana Smiles, these are the top five tips for those looking to buy in a seller’s market.
1. WEATHER YOUR EMOTIONS AND MANAGE EXPECTATIONS
‘More often than not, buyers will need to attend several auctions before finding success and it’s a good idea to familiarise yourself with the process and variables before embarking on the home-buying journey,’ Ms Smiles said.
‘Auctions can be stressful, tedious activities, particularly when you’re emotionally invested in a property. You will lose several homes that you pictured a life in; be mentally prepared for this so as not to lose hope.’
Ms Smiles said it was important not to over-invest in a home and if nervous it may be a good idea to enlist family or friends to bid on your behalf.
2. KNOW THE MARKET YOU’RE BIDDING IN
‘The value of a house is what someone is prepared to pay on the day. Value comes down to how many parties are financially and emotionally invested,’ Ms Smiles said.
‘You may arm yourself with research and recent sales, but in today’s market this will only provide an indication of what the home could go for.’
She said to remember that while you’re buying a home, property is ultimately an investment, ‘so think about the long-term capital gains’.
3. CONSIDER ENGAGING A BUYER’S ADVOCATE
‘If you feel engaging a third-party expert will help alleviate your stress on the day, consider engaging a buyer’s advocate,’ Ms Smiles said.
‘Buyer’s advocates will help make your auction experience and decision making on the ground based on logic.’
4. BE TACTICAL IN YOUR BIDDING APPROACH
Be confident in your bidding.
‘There are many opinions on what the ‘right strategy’ is to bidding at auction. My opinion is there are many that work, but again it all depends on who’s in attendance on the day and how invested they are,’ Ms Smiles said.
‘Always bid confidently. This shows the auctioneer and, more importantly, the other bidders, that you are here to buy and mean business.’
5. BE PREPARED TO SACRIFICE
Don’t sacrifice a seaside holiday if it’s central to your happiness.
‘To achieve a deposit that will allow for a manageable home loan, lifestyle sacrifices are necessary,’ Ms Smiles said.
‘As you’re in a bidding war for your ideal property, you’re going to run a list in your head of everything you would give up to be able to stretch your budget.
‘This is fine, but know your limits and what lifestyle will truly make you happy. If a holiday, new clothes and two cars are part and parcel of you and your family’s happy life, don’t go there.’