- Buyers need to be clear on their strategy of purchase.
- Buyers need to be more familiar with ‘no price’ strategies.
- Buyers have never been better looked after by agents.
CoreLogic figures have showed that somewhere between 2800 and more than 3000 homes were taken to auction across the combined capital cities each week during May 2021, proving an extraordinary month for auctions so far this year.
The buyer today needs to feel very comfortable with auctions because there is every likelihood the property they want will go under the hammer.
They need a strategy, which I could simplify with three instructions: do your research, don’t be late and don’t bid more than you can afford.
The buyer also needs 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, even though there was bidder activity from the start, things moved in relatively small increments. Now 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 population redistribution, interstate and interregional migration, and in particular the movement of Sydney and Melbourne buyers, more people are familiar with auctions and well-versed in auction practices are present in markets they’ve not entered before. Buyers at auction are now facing a sophistication in competing buyers that they may not have encountered before.
Auction or not, buyers really need to think about their 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 had a chance to make an offer, is unattainable or simply never comes to market, reassess what you really need right now, and maybe getting into the market in an alternative area or property will work for you after all. An alternative strategy may mean you’ll already be in the market when you want to make your next move and not be left behind.
Buyers should become more familiar with ‘no price’ strategies, which include ‘for sale by negotiation’, ‘for sale by tender’, ‘auction’ or a ‘contact agent’ statements.
Property cannot be marketed in a misleading or deceptive way, ever, but buyers, sellers and agents contend with different regulations around ‘no price’ in different Australian states.
However, buyers 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 the buyer to focus on the property’s merits. Does it tick all the boxes? Is this a property worth pursuing?
Listing without a price is much better than listing at the wrong price, which can result in the buyer not being given the chance to make up their own mind.
If there is buyer frustration out there in the market right now, I am convinced that buyers will adjust to the new conditions. They will ‘rightsize’, renovate, upgrade, look at different markets and become increasingly more educated and in control of their strategy of purchase.
Having a great relationship with a number of agents has never been more important.
I don’t believe we have seen this many properties sell before going to portals prior to the market conditions we have seen in the last 18 months or so. The volume and frequency of properties selling before they are advertised in traditional ways is much higher than we have seen.
I’d thoroughly recommend building relationships with sales agents, so they have a personal connection with you and know what you are looking for. There is no reason today to be ‘just a number’ with a dollar sign attached; great agents will not make you feel this way.
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 today’s buyers 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.