The property market is hard to read. Sometimes it moves along slowly without much change. But it is not uncommon for it to take a rapid turn, totally throwing off both buyers and sellers. You can plan all you want, but really timing and smart decisions are what’s going to bring you success.
Make sure your clear about what you want, and don’t be afraid to take action when the moment is right. In a seller’s market, it’s common for buyers to become intimidated and reactionary. Many people fall into the same traps, so before this becomes you, consider the following advice to help you save time and protect your emotional stability.
1. You Hesitate, You Lose
Being a buyer in a seller’s market is like living in a shark tank. Lack of preparation has been the downfall of too many investors, and it usually causes them to miss out on their dream property. When there are more buyers than properties, there is not much incentive for owners to accept anything but the perfect offer, and it is likely they will get it as people try to beat out others going after the same property. So, hesitation is really your enemy in this situation.
Understand exactly what you want, and then when you find it, make an offer right away. You’ll need to have your finances all squared away to do this—both the deposit and an approved loan—and be ready to move with paperwork and inspections so that you can close the deal as soon as possible. Any hesitation can cause the property to go to someone else.
2. Be careful of getting desperate
The process of deciding, making offers, getting rejected, counter offering, changing your mind, etc. will suck all your time away from you. It’s easy for this to turn into frustration, leading you to just want to get the process over with no matter what. You need to prevent this urge to make sure you are making a sound investment, not something that is “okay to live in.” On the flipside, don’t jump into something you love the first time you see it. You still need to do background checks and inspections.
If financial success is the ultimate goal, it doesn’t matter if you are in love with the property. It’s more important that it’s right for your ideal tenants. If you get outbid, there are always auctions. But the experience you will gain is important for understanding the process so that you can ultimately make the best investment decision.
3. The market is always smarter than you
It’s important to understand the property market and to know its trends, but this is not enough. Even a relatively stable market such as the Australian property market can have its moments of instability. Use the knowledge you have, but make sure to check what’s happening from week to week. It’s not uncommon to think you have a clear understanding only to find something changed that will bring you right back to the beginning.
Make sure you know what type of property you want, your budget and your long-term goals. You’ll find what you’re looking for, but don’t give into the pressure of seller’s market and try to outbid others for the ideal property. If it doesn’t fit your budget, it’s not good for you. Simple as that. Sometimes the timing is just wrong, and if you can come to terms with that, and accept that the market is evolving, you’ll be able to better adapt so that when the right property does come along you can jump on it.
4.Your Budget is not flexible
Finding out how much you are willing to and capable of spending is one of the hardest parts of any property investment. You need to figure out how much you can pay not only now, but also going forward. Obviously you can never predict the future, but there is nothing saying you can’t make a plan for the next 20 or so years. Detail out everything in your budget, from the big stuff to the little stuff. Figure out where you can save and where you can bring in some extra income. It’s critical to be as honest as possible with yourself. Don’t tell yourself you’ll eat out less when you know you won’t.
Once you have all that squared away, plan around it. This will allow you to figure out exactly much you can afford, which will allow you to bid freely and openly. And more importantly, it will tell you when something is out of reach and that the best thing is to walk away.
5. Don’t become a ‘wood duck’
The process of buying property is frustrating and time-consuming, especially in a seller’s market. Not only does it take a ton of time to find properties your interested in, but you also need to travel to visit them, and then if you’re repeatedly rejected, even more time will pass. This can lead to desperation, and one moment where you are particularly vulnerable is right after you miss out on an ideal property. You’ve just spent a bunch of money on inspections, and then you lose out to a higher bid or for any number of other reasons. It’s at this moment you become known as a ‘wood duck,” as you are in danger of making a desperation bid and doing something you’ll regret later on.
Luckily for you, there are lots of ways to get help with this process. Investing in property is no small task, and you should not take it lightly. You need a patient and well-thought-out approach. Go slowly, prepare yourself and be sure of your plan of attack.
Talk to your agent so that they know what you’re goals are and also so that they can let you know about attractive listings as soon as they appear. Go over the market with them so that you know what to expect and so that they can offer sound advice as to when and where to make a move. Relax, be patient, but also be decisive. Soon enough you’ll find your dream property and all the headache will prove worth it.