Dwelling values in most parts of the country soared over the March quarter according to the latest research.
The rate of percentage growth – often in the double digits – has left many buyers on the sidelines because they haven’t been able to calculate what would have made a solid offer.
Indeed, we’ve heard of a lot of buyers using old sales data from last year when trying to determine the “value” of a property they are interested in purchasing.
In a steady market, even sales data from more than a few months ago is often too old, let alone when prices are rising as quickly as they are now in the hot market.
It’s important to understand that while sold data is available on-line for free, it usually only becomes available when the property has settled, which is generally a month or two or even longer after the sale has actually occurred.
For example, a property sales record that becomes available in early May might be for a house or a unit that sold in January – and we all know what has happened to the market in that period of time this year!
How do buyers understand what’s happening in markets right now?
Most potential buyers only have data that is readily available online to help them better understand property prices.
As I’ve mentioned above, these sales results are usually a few months old already, so are pretty much redundant during hot market conditions.
Professional buyers’ agents, on the other hand, have strong networks with local sales agents.
This means that we are regularly on the phone with agents to not only discover any potential off-market opportunities but also their recent sale prices.
And when I say “recent” I mean in the past few days and weeks – not since the start of the year!
The reality is the average agent is not going to divulge this sensitive information to a random person who rings up and asks for their recent sales results.
However, by growing successful relationships with sales agents over the years in the areas that we purchase for clients in, agents are more open to providing the intel that we need to determine the appropriate market price for a property every day of every week.
Some buyers will also use the price that properties are listed for online as a “guide” when making an offer.
The reality of the situation at present is that many properties are selling well above their listing price and even more so when sold at auction.
This means that they might put in an offer of $655,000 when a property is listed at offers over $650,000 but are not in the running at all because the highest offer was $750,000 – because that is the true market price in the current hot conditions.
One of the key advantages of working with professional buyers’ agents is that we also have access to more off-market opportunities for our clients.
Many buyers might think that no one would sell their property off-market when there is far more demand than supply at present, but that is simply not the case.
Vendors choose to sell off-market for a variety of reasons during all market conditions, including the current one.
The key is to always understand the opportunity that is being presented to you and offer a solid price to successfully purchase the property.
Now, that price may be what they could have achieved on the market, or it could be more, or it could be less.
That’s because there are myriad factors to consider when submitting an offer, including the seller’s motivations.
However, if the price that is offered is accepted, then the seller is happy, and at end of the day, so are our clients.