Prices up 20%
Enquiry up 200%
Sales up ???%
More than ever before in my 17 years as a buyer’s agent, we are working with homeowners.
First home, second home, downsizers, all types are contacting us for help to get into the property market.
As a fee for service advisory, our clients invest money into a superior outcome via payment for our services.
In other words, we charge a fee.
In a more ‘normal’ market, homeowners are less keen to pay a fee, and almost always, first home buyers have zero desire to pay our fee.
So they don’t contemplate engaging our services.
Over the past 6 months, this has changed drastically.
The number of emails and calls from people who simply want to get into the market is astounding.
Don’t misunderstand me, the opportunity to help more people is very welcome.
However I can’t help but wonder what the fuss is all about.
Markets go up and down all the time and usually, property is a slower moving beast.
While the past 6 months have been hot, it will cool at some point, and right now it is driven by emotion.
It seems emotion begets emotion.
With that in mind here are my top tips if you are buying in a hot, emotional market.
1. Know what you want
2. Have your team
3. Be ready to act
4. Don’t Pretend
5. Have a clean contract
6. Be realistic
7. Be calculated
8. Enjoy the ride
Know what you want
Might sound pretty straight forward, but this is the thinking part of the process.
I always talk about research and this doesn’t change in a hot market.
Ensure you know your areas and what you what to achieve, your budgets and exit strategy. Yes even in an owner occupied purchase, you should be thinking about exit.
Knowing what you want makes it much easier to both convey information to the agent and find your next home.
Have your Squad
In any purchase this is important. I won’t cover in full today as I have spent time on this before. Having your squad of broker, lawyer, inspectors, and advisors on hand will enable speed when needed and alleviate stress.
Be ready to act
Finance in order, deposit ready, your squad on standby. Do whatever you possibly can to be ready to move quickly. This does not mean that you make rash decisions, rather it means the decision process is only about the property, not about the transaction or decision.
A decision clouded by the need to get money, discussion about areas, and does the budget stretch, means that you spend lots of time talking about things, that could and should have been decided beforehand.
Agents sell for a living and they get very good at sorting out tyre kickers from real buyers.
If you pretend to be looking, or have little interest, in this market it may cause you a problem. Normally I say to keep your words to yourself and not share anything with an agent.
In a hot market, where you need to be in the game to get a look in, you need to balance oversharing with the absolute need to indicate your interest to make an offer.
If not, the agent and the house, will move on, quickly.
Have a clean contract
Often we buy with lots of ‘out’ clauses and things that benefit us. In a hot market, we keep our contract as clean as you can get.
The cleanest contract ever is cash, unconditional. If you can do that and are comfortable, you will win over everyone else.
That is not something everyone can do. These are the things you might be able to do.
A decent sized deposit, keep your finance time down, have as short as possible inspection dates, get any superfluous clauses out. Stick to finance and inspections only if possible.
Anything above a cash unconditional contract is classed as ‘Hairy’ to an agent. Most people will need some clauses, so keep yours as minimum and short as possible, while still not exposing yourself.
In a rising market you might need to adjust your expectations on price, location, features, timeframes or all of the above.
You must have this very right. If you start with the wrong expectations, it will cost you time while you readjust. In that process of time, you may even find the market has moved and need to readjust again or worse still, miss out due to the amount of time taken to get acting.
Be realistic from the beginning and you will act quickly in a hot market.
While it might sound at odds to the points before, it isn’t. understanding you are operating in a hot and emotional market means you need to get savvy, quick smart. Know that the market is on the move, know that it will top out, know your limits and know the cycle and times.
While it might be better to have exposure in this market, it is never good to be over exposed financially and stretched beyond your abilities.
Instead of stretching and being in constant pain and worry, reset your expectations as above and get back into the market in a different or cheaper way.
That way you capture the positive market exposure, but not overexpose yourself.
Enjoy the ride
Any time you purchase a home, it should be memorable and enjoyable. Buying in a hot market can be the same if you follow the tips above.
Don’t let the hype and emotion negatively impact what should be a fun time.
Hot markets are a big ride and if you are ready for the rush, making offers and buying will be a massive high.
It will be memorable and fun as long as you are not over exposed and operating on emotion.
Like everyone else bidding beside you…
Since 2004, Scotty North has been helping people buy the best properties for their needs at prices that simply speak for themselves.
Scotty has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model.
Scotty North is a Qualified Property Investment Advisor (QPIA), with accreditation’s in financial planning, mortgage broking and real estate.
By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scotty designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.