Savvy buyers seeking a secret weapon to get ahead in the current seller’s market are realising that they have a few bargaining tools in their arsenal.
Property experts say that purchasers who are prepared, open-minded on time frames and can look outside the box when buying will have a precious advantage over the crowded competition.
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Lynette Malcolm, a selling agent with Chadwick Real Estate on Sydney’s North Shore, said she had seen settlement periods extend to new lengths since the post-pandemic property market took flight.
“Many vendors want long settlements at the moment, given the fact that they’ve got uncertainty around where they can go. The market is so strong they know that they can sell, the issue is where can they go? A lot of our vendors know they can capitalise on what’s happening, but they want to have more certainty with the sort of settlement that allows them time to find something that’s suitable,” she said.
While standard settlement periods range between 30 and 90 days, depending which state or territory the sale takes place in, the current market is creating an environment for much longer time frames.
“I know of one settlement that was 18 months long,” Ms Malcolm added.
“Normally buyers say they want 12 weeks, but are now asking ‘What’s okay with the owner?’ Usually buyers will be very strident around the conditions, but now they’re using it as leverage, aside from the price, so they can better negotiate with the owner,” she explained.
Ms Malcolm said some buyers are even negotiating with lifestyle options, such as furniture inclusions, which can help out downsizing sellers.
“I’m seeing a big shift towards interior designers getting involved before settlement, or purchasers wanting to negotiate more of the furniture into the sale so it’s more of a turnkey opportunity for them. It’s often buyers coming from smaller properties wanting to move straight into the bigger estates,” she said.
Offer to become a landlord
Another way buyers can bridge the stressful gap that vendors may have between selling and buying is to become their instant landlords, according to buyer’s advocate and president of the Real Estate Buyers Agents Association, Cate Bakos.
“I’ve definitely been dealing with a lot of lease backs lately,” Ms Bakos said.
“If I’m trying to buy a property and I know that vendor hasn’t bought yet but would love to have the sale proceed so they know how much money they’re working with, there is the option of a long settlement.
“But in that case they won’t have the money in their hands.
“We can get them the best of both worlds and offer them a type of settlement that’s quick enough to get their money, but gives them the opportunity to lease back their home for a certain number of weeks or months.
“It means they don’t feel pressure to try and find something quickly and they can take their time to find their next home,” she added.
Speak from the heart
Although on the surface the business of bricks and mortar might appear to be a black and white transaction, Ms Bakos said buyers shouldn’t discount the value of making a personal connection.
“If it’s ever been and emotional sale, whether it’s a deceased estate, children selling their parents’ house, or a regretful sale – and it’s an owner-occupier who’s buying it – we’ve actually had success with writing a heartfelt letter,” she said.
“Sometimes a seller wants to feel that they can connect to the buyer and a lot of people really value that.”
“It won’t necessarily get you the property for a sharper price than someone else, but if there are other terms, it might sway the vendor. You can say, ‘These are the reasons we love it, we’re want to raise our kids there, we really love your garden’. It’s got to come from the heart though, because I think a vendor can sense it if it’s not real,” she explained.
Ultimately, preparation is key
Being a buyer in a seller’s market is a challenge, especially when houses are being snapped up in a matter of days in some neighbourhoods.
According to April data from CoreLogic, Sydney’s houses are averaging 23 days on market, while in Adelaide it’s 28, and Melbourne it’s 29. In Hobart, however, it currently takes an average of just 22 days to sell a house.
“Be pre-approved with your finance and be ready to go. Obviously prepared buyers won’t be on their own, but they’ll put themselves in front of anyone who isn’t, and that’s huge,” Ms Bakos said.
“If a buyer can say they have confidence that they can borrow, and they can put in an offer that’s not subject to finance, then that definitely holds them in good stead, without a doubt. And if they can get a builder through the property quickly, and be ready if pre-auction offers are triggered, then they can move at speed.
“A buyer who can get the inspection done and move faster than anyone else can potentially trigger a sale that might throw out the competition,” she added.