Real Estate Agents & "Under Quoting"
I don't know why real estate agents are getting such bad publicity!
Recently agents have been declared as "under quoting" in the current property market.
I said in a recent blog post that one of the top 3 property buyer mistakes is having no understanding of the local market.
The importance of doing your own homework can not be overstated. If you do, you get your own understanding of the local market you are looking in. It's no good blaming agents for under quoting because you need to set your own realistic expectations of what the price range for the property really is.
After all, this is probably one of the most significant transactions you will make and you need to RESEARCH, RESEARCH and RESEARCH the property market.
It doesn't matter if this is your first home, 5th investment property, or next commercial purchase.
A tell tale sign about what the ultimate price might be is (and this is the simple bit), if there is a high degree of interest, in a heated market, then you can expect to pay above the quoted price. Allow a buffer of 10% to 20% above the quoted price.
Remember, some people just have deeper pockets than others and will pay whatever it takes to get a property.
Real estate agents represent the seller, not you the buyer, and quite rightly give a market estimate to you, the possible buyer. Agents use recent sales data, their own experience and judgment to give a price estimate. They are doing their job, the best for their client, and exactly what they are paid to do.
Remember, this is a "hot" market ~ anything can happen. Auctions are seeing record prices being set and this is in the papers every weekend ~ this is not new news.
One of my best TIPS I can give you, is to be honest with an agent about where you are in the buying time line. I know this sounds a little bit funny, but let me explain.
I say be honest with the agents, so they have an understanding of where you are at; they can be more helpful answering your questions; won't chase you for an offer when you are not ready to make one; help educate you about the market; and will keep you posted on what else comes up. There is nothing wrong with window shopping, that's the start of your first nibble of interest at buying and agents can help you along your journey.
So, lets work out where you are in the property cycle, you are:
A renter or home owner and just starting to look (you are at the start of the buying cycle - you are months away from being ready to purchase)
Selling your own place, auction is coming and you are serious about buying, but have to wait until you sell your own place (your in the middle and about to become a "hot" buyer)
Cashed up, ready to go, you have sold your place / won the lotto(you are a "red hot" buyer)
If you are looking to buy property, use this check list to see you in the right direction and it applies to ALL property buyers:
You MUST have an understanding of the local market,
Take time to go to as many AUCTIONS and open days and see what happens,
Use the internet to RESEARCH what's on the market, why it might be selling, where it's located and keep track of it.
SPEAK to all agents about what you are looking for. Ask the agent's opinion of what's happening in the market
Be HONEST with agents about where you in the buying cycle
I completely emphasise at the disappointment some of my clients feel at missing out, particularly when its their first home. Remember, even the most experienced buyer will miss out on a property. There is no point in having hurt feelings about this, it just makes you more resilient.
I often tell my clients:
“If you miss out on the first one, don't worry, there are plenty more out there, and the perfect property is waiting for you ... this one just wasn't meant to be.”
Contact me to discuss your real estate or commercial conveyancing needs on + 61 (2) 9279 1100 or email firstname.lastname@example.org