Author: Josh Masters, BuySide
If you’re out there looking for your next home to buy, you’re probably wondering whether it’s the best of times or the worst of times to try to get out and inspect properties and put a deal together.
Whether you’re being forced to move because you’ve just sold yourself, or the new living arrangements under the lock-down have pushed you to realise that you finally need a bigger home, there are a few things worth knowing if you’re going to venture out in the current climate.
1. Buyers are still buying, sellers are still selling
If you read my post from last week you’ll know my views on where I see the market heading (click here if you missed out).
My take was that while I don’t see values dropping so much, I do see sales volumes plummeting as people are restricted to private inspections only.
This view has been reflected, not just with my own clients (many of whom have pressed pause while others continue unphased), but also with the selling agents that I have been in contact with.
I always like to present the hard facts though, and CoreLogic has been kind enough to conduct a survey with agents in the last couple of weeks to show us how the response has been to recent changes.
As you can see from the survey of buyer and seller enquiries below, some agents have noticed relatively little change, while others have seen a remarkable drop off…
As you can see, there is a significant number of agents, around a third, that have said they have seen buyer numbers fall by more than 50%.
That’s a fair whack.
What’s interesting though, is that just over a quarter of those surveyed considered things “relatively unchanged”.
It’s also equally interesting when we look at seller activity, where in an almost similar fashion, nearly a third of agents have seen the interest of sellers wishing to list their property fall by over 50%…
Again though, more than a quarter of all agents surveyed had seen relatively little change.
This sits in line with my experience, where some of the agents I have spoken to have had nearly all of their vendors decide to pull their property from market and wait it out, while others have sold multiple properties this week alone and have listings in the double digits.
This is a clear sign that some markets are behaving differently to others, but more importantly, that parts of the market are continuing to move forward.
Don’t make the mistake of thinking that the majority of the population is holed up at home in front of Netflix and therefore you should too.
Deals are still happening and it’s not uncommon to see one or two other buyers on a deal that you still need to compete with to win the purchase.
2. Book a private inspection and leave the crowds behind
If you haven’t already gathered, open homes and auctions are no longer allowed under the new social distancing recommendations, so booking a private viewing with an agent is standard if you want to get in to view a property.
Many agents are now putting video walk throughs online and realestate.com is now promoting these videos as the alternative if you can’t make a viewing.
We all know that a video is no substitute for being there in the flesh though.
There’s no better way to get a feel for how the light works in a house, what the flow of the layout is like and how the house feels throughout other than being there in person.
Don’t be put off by a private inspection though. I’ve been organising private viewings for clients for years and it’s as simple as locking in a 15 to 30 minute meeting time with them and meeting them on site.
You then have the whole place to yourself to walk through as you please.
3. Test the agent on price, but don’t assume a discount
If you read my article from last week I mentioned that property traditionally holds up well in times of crises, and that it wouldn’t be the market as a whole that falters in the coming months, but those individual households that have come under financial strain.
This could be a good time to negotiate hard, but don’t make the mistake of thinking that a lockdown is going to make all sellers accept a low-ball offer.
You will still need to listen to the nuances of what the agent is saying the vendor will accept and how they explain the reason for selling – listening for clues of distress.
You may even want to put in an early offer well below expectation and gauge their response as this can be the best way of testing their appetite for a quick sale.
Be prepared to pay what the property is worth though. There may be other buyers who are hungry to secure their ideal home and won’t waste time with low-ball offers.
It’s best to know what the property is worth, see how they respond to an early offer below market value, but be prepared to negotiate against other potential bidders should a more competitive offer come in.
There’s no doubt that this is a challenging time to find a home and it certainly doesn’t feel like business as usual.
In times like these, having a professional buyer’s agent on your side can be invaluable as we still have the freedom to operate as a business and travel where necessary to find the right home for our clients.
A buyer’s agent can organise and schedule multiple private inspections, reviewing and reporting back on only the most worthwhile so that you can keep visits to a minimum.
There are also a growing number of deals that are being sold on the quiet, where sellers aren’t willing to open their home up to any enquiry, but will consider opening to a professional buyer with a verified client.
So if you are facing a situation where buying your next home is starting to feel more like an essential item rather than a preferred option, consider some professional help and remember that the market is still ticking along.