CoreLogic figures have showed that somewhere between 2800 and 3000 + homes were taken to auction across the combined capital cities each week during May this year.
If you are a buyer today, you need to feel very comfortable with auctions because there is every likelihood the property you want will go under the hammer.
You also need a strategy. I have three simple suggestions: do your research, don’t be late and don’t bid more than you can afford. You also need a strategy for managing disappointment. There will be plenty of competition and you don’t have that property until the third and final fall of the hammer.
In the past, we were familiar with auctions where things moved in relatively small increments even when there was bidder activity from the start. This year we are seeing properties reach their reserve and things go crazy in a flurry of bidder activity. This is not the time for the buyer to lose their nerve.
Through greater people movement across states, especially Sydney and Melbourne buyers, auction-savvy people are active in markets they may not have entered before. Buyers at auction are now facing competing buyers with a degree of auction sophistication and know-how they may not have encountered before.
Auction or not, you really need to think about your strategy of purchase.
If you have been constantly the underbidder, you need to reassess how you are going about things. If your ‘dream home’ is repeatedly snapped up before you have a chance to make an offer, is out-of-reach or never comes to market, you might reassess what you really need right now. Maybe getting into the market in an alternative area or property will work for you after all. That way you’ll already be in the market when you want to make your next move.
As a buyer, you should become more familiar with ‘no price’ strategies, which include ‘for sale by negotiation’, ‘for sale by tender’, ‘auction’ or a ‘contact agent’ statements. Buyers, sellers and agents contend with different regulations around ‘no price’ in different Australian states. Rest assured, property cannot ever be marketed in a misleading or deceptive way.
You should not be deterred or frightened by a lack of price. What it does is give all parties the opportunity to focus on nonprice issues. It allows you to focus on the property’s merits. Does it tick all the boxes? Is this a property worth pursuing?
If there is frustration out there in the market right now, I am convinced that buyers will work through it. They will ‘rightsize’, renovate, upgrade, look at different markets and become increasingly more educated and in control of their strategy of purchase.
For you, the buyer, it has never been more important to have great relationships with agents. The volume and frequency of properties selling before they are advertised in traditional ways is much higher than before. I don’t think we’ve seen this many properties sell before going to portals.
I recommend building relationships with sales agents, so they have a personal connection with you and know what you are looking for. Great agents will never make you feel ‘just a number with a dollar sign attached’.
Buyers have never been better looked after by agents.
Buyer satisfaction is extremely high on the real estate agenda. Please do not think you are being overlooked or ignored by your agent who is managing huge volumes of work through increased buyer enquiry, greater numbers through open homes and multiple offers.
Agents are fully aware of the frustrations that you are facing, which is why great relationships have never been more instrumental in achieving successful outcomes.
I hope this information helps in some way to manage expectations, set your new buying strategy and help you secure the property that is perfect for you.
- Be clear on your strategy of purchase.
- Be more familiar with ‘no price’ strategies.
- Buyers have never been better looked after by agents.