The Australian housing market is highly competitive and crowded with experienced investors. First home buyers often find it daunting. Long-time investors have advantages in knowledge and financial capabilities. However, there are ways for first home buyers to outbid them.
How To Outbid Your Competition?
The answer is in how you make an offer on a property. Most of what you can do to improve your chances of securing a property must take place before you submit an offer. Here are some steps you can take to show yourself to be a serious buyer:
Gaining a pre-approval from your lender is the first and foremost step you can take. This tells you your budget and helps narrow down the type of property you can purchase. Securing a pre-approval also makes you attractive to sellers, as it signals that you are serious.
2.Research The Property
One of the most common reasons for an unsuccessful offer letter is a lack of research. Always do research. Look at the listing prices of similar properties within the area to evaluate what’s a fair price. This way, you can strategise your offer price.
As a first home buyer, you can make your offer letter stronger if you correctly gauge the seller’s motivations. Once you know them, you’ll know the kind of offer the seller would find most attractive. For example, if the seller is looking to part with a family house that has been passed on for generations, they might be more inclined to sell to someone with a family to raise.
Differentiate Your Offer
Once you’ve taken these steps, you can move ahead with your offer letter. This is where you can differentiate your offer from experienced investors. The best way to do this is to show flexibility. You can do this by:
Waiving The Cooling Off Period
Agreeing To Delay The Settlement Date
A cooling off period exists primarily to protect the buyer from the harsh financial consequences of withdrawing an offer. Forgoing the cooling off period is a way to show your strong intent to purchase the property. This can be a big factor in the seller accepting your offer. If a buyer withdraws from an offer with no cooling off period, he/she will face heavy costs, so waiving it shows one is definitely serious about buying. Be absolutely certain you want the property, however, as you don’t want to be stuck with hefty fees or a property you don’t want. Before making this decision, we strongly recommend you speak to your lawyer/conveyancer for independent advice.
Contact us at 1300 889 743 or fill in our online assessment form to learn more about cooling off period.
Inspecting the property to see if it is in proper condition is common practice. This usually includes a pest inspection and checking plumbing systems, electrical wiring and more. Forgoing some or all of these inspections makes the process more attractive to the seller, as the exchange of property can be done more quickly. However, this must be done with caution. Buying a property without getting a property inspection report is extremely risky. Once you buy, any repairs or problems are your responsibility. Again, before making this decision we recommend you speak to your lawyer/conveyancer for independent advice.
When buying a property, you can be flexible with the settlement date. This is something most experienced investors are not comfortable doing. If you let the seller know you are willing to be flexible with the settlement date, this makes you more attractive as a buyer, because sellers are often anxious about finding a new home. Giving the sellers time to rent out the property while finding a new home for themselves can give you an edge over other investors.
As a first home buyer, competing with experienced investors is a challenge, but following the steps mentioned above can help make sellers accept your offer over other investors’.
If you want help securing your dream property in this highly competitive market, contact us at 1300 889 743 or fill in our online assessment form and our specialist mortgage brokers will get back to you.