5 actions to help buy your dream home in a booming market
It can be brutal out there – the booming property market right now has left many wondering what more they can do to find their dream home.
However, there are several strategies you can deploy to reduce the risk of losing a property that’s captured your heart. But first let’s take a quick look at some of the behaviours you might be experiencing in the market.
There’s been increasing claims that agents are underquoting or providing incorrect price guides to increase the number of people interested in a property. With prices rising so quickly though, it is becoming increasingly difficult to provide an accurate price estimate, especially when the data that we use to calculate those prices is often quickly out of date.
Next, we’re seeing occasional “gazumping” – the practice of an owner accepting an offer and then leaving that buyer for a higher bidder. Some might call this “dirty pool”.
The original buyer is never told what’s happening or given an opportunity to make a better offer. They’re often left high and dry, having spent hundreds of dollars on building and pest inspections with no recourse to recoup these costs.
Importantly, under law, an agent must pass on all additional offers until contracts have been exchanged – even if a deposit has been paid. Getting your contracts exchanged as quickly as possible nullifies any risk of gazumping.
Here are five top tips for securing a home in a booming market:
- Organise a pre-arranged loan. This is an essential part of the strategy as it defines how much you can spend and it gives you instant access to your finance.
- Do your homework on the local market. How much are prices rising locally? What did properties nearby sell for over the past few weeks? Historical data is quickly out of date in the current market.
- Seek written proof that your offer has been passed to the property owner by the sellings agent. Legally, the agent must pass all offers to their client.
- Ask the seller’s agent for a written copy of any other subsequent offers that have been received. This not only creates a paper trail but allows you the opportunity to increase your bid if that’s what you want to do. There is now technology that makes the offer process very transparent.
- Once you’ve found your dream home, use the pre-arranged loan and savings to put down a 10% bond or deposit as quickly as possible. Do this with a bank cheque. This should avoid any delay in exchanging contracts.