Five Tips for Buying in a Rising Market

Nationally, property values are increasing and Perth is no exception.
Often in a rising market where there is a shortage of stock, as we currently have in Perth, there can be a tendency to ‘rush in” due to fear of missing out.

It only seems like yesterday, during the boom of 2006 when Perth prices increased by 42%, that buyers were bidding tens of thousands over the asking price to secure the home of their dreams.

On more than one occasion buyers, especially first home buyers, burst into tears after being informed that the property they were enquiring about sold on the first day.

Of course nothing remains the same in life. Booms come and go, as do busts.

The bubble burst in 2007, then we had the Global Financial Crisis followed by a low point in buyer activity in 2010/11. Now in 2013/14, things have picked up considerably, especially since interest rates have fallen to their lowest level for at least 50 years.

Stock levels, at around 9,000 properties for sale in Perth, are well under the long term average of 12,000 to 13,000.

Certainly, the $400K to $700K price bracket is hot at the moment. The higher end though, is steady at best.

So, what is the best strategy for buying in a hot market?

• Get your finance, pre approved. Seems obvious, but it will certainly give you an edge and more confidence if you know your borrowing capacity.
• Do your homework, take your time. There is always a new opportunity just around the corner. Don’t allow yourself to be panicked into making a decision by a sweet talking salesperson.
• Put in a fair and reasonable offer for the property. Trying to ‘steal’ a realistically well priced property will do you no favours and you will only antagonise the seller.
• Be decisive. Having done your homework, once you find the property you want to buy, then just go for it. As we’ve heard many times, ‘He who hesitates is lost’.
• Don’t complicate things. Putting unrealistic demands on the seller doesn’t help. Be reasonable with the conditions you put on the offer. Everyone likes a simple, straight forward transaction. The more conditions you put on the contract, the less responsive the seller is likely to be.

These are just a few of the strategies you can use when buying in a hot market.

If you need any advice about buying or selling please feel free to email or call me direct.

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