Property experts reveal how to win in competitive housing market

If it was only this simple …

While falling interest rates often mean better borrowing capacity and more opportunities for buyers, they also usually mean more buyers – which can sometimes make it harder to secure a home.

Luckily there are a few strategies that you can use to get ahead of the game in a competitive market.

When interest rates start to fall, competition tends to heat up.

FALLING RATES TO DRIVE DEMAND

Sydney buyers agent and founding director of Bought, Bianca Field, says buyers are already starting to move more quickly now that rates are falling.

“I’ve seen an increase in the urgency of them wanting to buy faster,” she says. “They’re anticipating that there’s going to be more demand and they don’t want to be buying with the increased amount of buyers looking.”

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City regions where prices grew fastest after rate cuts

REBAA president Melinda Jennison from Streamlined Property Buyers says markets where there is an undersupply of housing, such as Perth, Adelaide and Brisbane are likely to be the most impacted by rate cuts.

“It will definitely have an impact on buyer demand,” she says.

Buyers agent Bianca Field from Bought. Picture: supplied

STANDING OUT FROM THE CROWD

So, how do you stand out against other buyers when it comes to making an offer?

Jennison says there are a number of strategies you can use – but first you need to understand the seller’s motivation.

“You can change your terms or the conditions of your offer but unless that appeals to the seller it might not have the impact that you’re wanting it to have,” she says.

For example, writing a letter that expresses your love for the property and why you would like to raise your family in it might not appeal to an investor’s emotions quite in the same way as an empty nester’s, she says.

REBAA president Melinda Jennison from Streamlined Property Buyers. Photo: Supplied

“If sellers are looking for flexible settlement terms, you can potentially negotiate a settlement time frame to be longer or shorter depending on what the sellers’ needs are,” she says. “You can also look at releasing the deposit early. Sometimes that can free up a seller to go and actually purchase elsewhere – and that might be the bottleneck that’s causing them to slow down the sale.”

PROVIDING CERTAINTY

Being finance-ready is also important. Being able to get a final approval on finance in the shortest time frame possible is very helpful as it adds more certainty to your offer, she says.

Another way to provide certainty is to put down a larger deposit.

“A larger deposit generally shows strength with the offer and provides a little bit more certainty and confidence for the seller as well,” she says.

Being finance ready and understanding the seller’s motivation are crucial. Picture: David Caird

GETTING AHEAD OF THE GAME

Another way you can beat the competition is to see the properties before anyone else does.

“Get in early,” Field says. “Target off and pre-market properties. Stay front of mind with agents by giving a clear brief – and three or four recent comparable sales is even better.”

If there is a property going to auction, Field suggests making “a pre-auction knockout offer” or rehearsing your bidding pattern before you arrive.

“An auction is designed to get the best outcome from a buyer because people get emotionally entangled and they don’t have enough time to think logically,” she says. “So if you buy a property prior to auction or through a private treaty, you can have a well-mapped out strategy of buying the home without the time pressure.”

Consider beating the competition by making a pre-auction knockout offer. Picture: Jeremy Piper

When it comes to making an offer prior to auction, she suggests asking the agent what the vendor’s dream offer is and explaining that you want to be competitive and will have to discuss the funds needed with your broker. If they can’t answer that, you’ll have to do your own research based on comparables, keeping in mind the market might be going up as rates drop.

“In four weeks time, you might be in a far more inflated market,” she says.

Research comparable sales carefully and keep in mind prices could be going up.

SIGNS OF A COMPETITIVE MARKET

Wondering what you’re up against? Our experts say the following signs usually indicate higher levels of buyer demand, meaning you are probably walking into a highly competitive market.

* High attendance at open inspections

* High bidder registrations at auctions

* Lower levels of properties listed for sale

* Properties selling quickly

* Sales prices rising rapidly

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