Xmas Head Storm…
If you think about it, buying and selling real estate is like going to war…
The vendor wants their perceived highest price and the purchaser wants their lowest perceived price.
The key word here is perceived = perception.
So where either party can take advantage of market conditions and of their oppositions weakness, they will do so. Perception can be altered in many forms:
- Renovations
- Right choice of real Estate Agent to sell with
- Time of year
- Downward pressure on interest rates
- Marketing of property ( not meaning big ad campaigns )
- Private Treaty verse Auction
- And a ton more
And in war we take every advantage we an get…
Occasionally some of these advantages align themselves for a short period. And guess what… it’s happening right now!
As investors who are ready RIGHT NOW to buy, and buy in QLD, we have the following strategic advantages over the vendor:
- Low interest rates
- Warm Weather
- Changed First Home Owners Grant
- Xmas holidays
- Auctioned properties
- Low consumer confidence
- Mortgagee Properties
Here is why…
- Low interest rates – people are looking at property, but not buying as yet – the astute are buying
- Warm weather – again gets people looking
- Changed First Home Owners Grant – now means first home buyers can only buy new properties to get the grant, leaving quality established houses for us to buy. Less buyers = less demand = bigger discounts on houses as vendors become desperate
- Xmas – there is something about this time of year where many vendor’s motivations change. There is something psychological about having their property sold prior to Xmas and also before school goes back in February. Like a burden has been lifted from their shoulders and they start the new year fresh.
- Auctioned Properties – Buying properties all across the country, I have found that only Sydney and Melbourne metro suburbs like auctions. The rest of the country simply do not take to them. I find on well over 90% of auctions that I bid at, I am the only registered bidder. Only bidder = low buyer demand = discounted property purchase price
- Low consumer confidence – we are currently in a place where buyers are doing their due diligence on locations to invest in prior to submitting offers. This will very quickly change.
- Mortgagee properties – now as a rule, these can be more hassle than they are worth – they are a buy as is scenario, meaning that if the oven is not working after settlement, then its your problem. But properties that are being sold now as Mortgagee properties were repossessed between 6 months and a year ago and appraised by the real estate back then too, in colder weather, when higher interest rates were around, when consumer confidence was lower than the current market. This can make them attractive. They are mostly offered as auctions as well. This is because the mortgagor needs to be seen in the public eye as giving everyone a fair chance at buying the property. The reality is totally different!
As a result of this, I am flying to QLD every week up until Xmas and again in the New Year. This way I can take full advantage of these conditions and scour for highly motivated vendors looking to sell their properties at huge discounts.
Now if that seems harsh, cruel or that I am taking advantage if others, then please remember whom I represent?
I represent you, the investor… And as the purchaser you are trying to get the property for as cheap as possible… I am simply do your dirty work for you!
This is what I am commissioned to do… and what sort of buyer’s agent would I be if I didn’t take full advantage of this opportunity for you?
Having said that, we have small window of opportunity to take advantage of these conditions. Consumer confidence is on the rise and it won’t be long until investors, currently in due diligence mode, get their wallets out and start paying far more for properties than I would pay. For us who already own, this is good news, as they will increase the values of our properties… for those who procrastinated… better get organised and ready to take advantage of our next location.
But for those wishing to go it alone, here are some tips:
- Look for houses that have had price corrections and been on the market for Months. Don’t know if they have or not, simply ask the agent…
- There is no such thing as a “too low an offer”, that’s smart buying – don’t ask, don’t get…
- Search for key words in marketing ads like – motivated vendor, desperate seller, priced to sell fast, owners moved interstate, give me any offer, all offers presented, mortgagee sale & owners committed elsewhere
- If the property is a mortgagee property and the electricity and gas are connected when you first inspect, then test everything that day so you know what works and what doesn’t – this way there will be no surprises at settlement
- And lastly my favorite – Mess with vendors heads – investing is war between you and the vendor, never let them know what you are thinking or which way you are going to move – quite often I will put in an insultingly low offer and a vendor will emotionally react as they are desperate to sell, so they counter offer. I will then sit and wait… this will frustrate the vendor to the point where they will ring the real estate agent hourly to find out where I have gone. You see, I am the only purchaser and they don’t want the real estate agent to lose me as a buyer. I wait and sit for a few days, then after the agent almost begs me for a second offer, I submit a second and FINAL offer… generally only a few thousand higher than my original offer. This will test their desperation to the maximum and often gets the deal accepted.
Happy Xmas shopping…