Buyers are always juggling three factors during their search: the property they want, where they want to buy, and how much they have to spend.
What isn’t considered as much is how long it will take to find something that meets all of their criteria. The longer the search takes, the higher the risk of the market moving beyond them.
Buying a property is a highly emotion experience. It is after all the place where you will live. You want it to suit you and your lifestyle, which you should absolutely aim to do.
However, a strange occurrence can happen if buyers find a property early on in their search that fits almost all of their criteria: they can pass on it.
Buyers need to make sure they aren’t passing on a good property at the risk of spending months in the market searching.
It’s a fairly natural reaction. If you find something early on in your search that doesn’t meet all of your criteria, it could be reasonable to believe it won’t take too long to find something that does.
Unfortunately that isn’t always the case. Buyers can pass on an oasis and unknowingly wander into the desert. They can spend months (years in the worst cases) looking for a property, all the while regretting they didn’t take their opportunity when they had the chance.
The reason? They can underestimate the market.
“The most important thing buyers need to do is understand the market they are about to enter into” says National Property Buyers Buyer Agent, Rob Di Vita.
“It can be easy to not appreciate the amount of activity in a market, and how fast prices can move. That can catch a lot of buyers out.”
In the intensity of the larger markets this can be particularly pertinent. According to CoreLogic, median dwelling values in Sydney moved up 6.6% in the three months to May 2016 – a dollar figure of just over $48,000. In the three months to November 2016, Melbourne moved 1.5%, or just over $9,000.
According to National Property Buyers NSW State Manager, Simone Luxford, “buyers can mistakenly believe they have more time than they do. As a result they can pass on quality properties in the hope of getting something a little bit better. But by the time they find something else, they’ve been priced out.”
The key to avoid prolonged search periods is to be prepared to compromise on something.
“If a buyer finds a property that meets 90% of their brief, they shouldn’t dismiss it.”
“I’ve known some buyers to pass on a property early on in their search that suits them almost perfectly, but they didn’t want to consider a small compromise and this becomes obvious to buyers in hindsight”.
“They perhaps didn’t like an aspect of the floor plan, or wanted to be near a train line instead of a CBD bus stop. Suddenly a search that would have taken six weeks becomes six months and in that time the market can move, meaning they have to completely revaluate their criteria and possibly end up changing what they originally wanted.”
Buyers shouldn’t jump on the first thing they see, however.
“A property has to suit what you need” says Rob Di Vita. “It’s too big a purchase to settle on just anything.”
“But if buyers keep holding out in hope for ‘the one’, they run the risk of the market getting too far ahead of them. What they end up buying can be different from what they originally wanted.”
So what is the key to avoiding this scenario? Buyers need to look at the suburbs that best match their budget and preferences.
“It is best to speak to a property professional before beginning a search” said Simone Luxford.
“Engaging someone who has an understanding of the overall market, and which suburbs will suit buyer’s best will make the process so much more efficient.”
For more information on how to make your property search as easy as possible, speak to National Property Buyers today.