Do Your Homework.
Early preparation is the key to buying in a hot market, a casual approach may result in the property:
- Selling as an off market that you didn’t even know about
- Selling before auction without you being notified
- Selling at auction for a price you weren’t prepared for
To help avoid missing out on properties you need to be more proactive:
- Visit promising properties early in their campaign, don’t wait until the last minute
- Undertake your sales comparison immediately
- If you are going to engage a Buyer’s Agent – do it as early as possible
- Don’t be afraid to spend a little cash on recent sales comparisons through RP Data, Residex or Australian Property Monitor
- Book an early Pest and Building Inspection
- Get pre-purchase approval on the contract and section 32
- Make sure you have the deposit and your finance is all in order – preferably in writing
- Check with the council for any proposed alterations or new developments
- Create a strong relationship with the areas key selling agents, pester them for any off markets or premarket properties – which will give you the edge over your competition
- Attend as many auctions as you can, to familiarise yourself with the process and get a feel for what comparable properties sell for
- Check with the agent how many contracts have gone out
- Check on how many views the properties internet advertisement has had
- Prepare an auction strategy, are you going to open the bidding, if so at what level, are you going to ask when the property is on the market
- Prepare a post auction strategy if the property is passed in (unlikely in a hot market, buy a possibility)
- Try and find out why the vendor is selling, have they purchased another property, if they have they may be more receptive to selling before
When buying property there are always opportunities no matter what the market. The slight difference in buying in a hot or rising market is you must be extra diligent with your homework, and you must not waver from the three P’s PRICE, PPROPERTY and POSITION and if you pay a strong price for an exceptional property – that’s ok.
What you don’t want to do is pay a strong price for something less than perfect.
It is these properties that may correct negatively if the current market was to level off or move south.