A buyer’s market has been tipped for Melbourne this year as prices continue to slump — but experts are urging those looking to take the property plunge to be careful.
Purchasers were as much at risk of overpaying in a slow market than a fast one, with many mistakenly assuming they had a better chance of snaring a bargain, according to Real Estate Buyers Agents Association president Rich Harvey.
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“Just because a property gets passed in at auction doesn’t mean there aren’t two or
more people interested who are sitting back, waiting to make their offer,” Mr Harvey said.
“Too often, homebuyers in this scenario end up competing blindly against multiple
parties and paying too high a price.”
Mr Harvey — a veteran buyer’s advocate who appeared as an expert on Channel 9 property show Buying Blind last year — said the main benefit of a softer market was that buyers didn’t need to rush into decisions.
But that didn’t mean househunters should “sit on (their) hands waiting for the market to plummet”.
Read on for his top tips for buying in 2019.
1. Get finance approved
Mr Harvey said tighter lending conditions were forcing househunters to get their finance approved before they even started looking.
“Finance delays will cause problems and can potentially cost you dollars if overlooked. Double check the date your pre-approval expires,” he said.
2. Think long-term
It was crucial househunters looked at property investing and home buying as a “long-term game” and didn’t worry too much about what was happening in the market in the present, the REBAA president said: “Make sure you consider your needs for the next five to 10 years rather than buying a home for now.
“This way, you won’t be forced to sell in the short-term.”
3. Negotiate like an expert
Negotiation was “a buyer’s best weapon against overpaying” in a slow market,” Mr Harvey said.
He urged buyers to seek out properties that had been on the market for two or three months for further discounting, and not to become complacent and think real estate agents were “an easy target” because there was plenty of stock or prices were down.
“Remember they’re the experts at negotiation, not you,” he said.
4. Don’t hesitate and try to ‘time the market’
Buyers, “don’t sit on your hands waiting for the market to plummet”.
“No one has a crystal ball, so act on the opportunities in front of you,” Mr Harvey said.
“When you find the right home, do your due diligence and act quickly. Quality locations and quality properties are more resilient to downturns.”
5. Get professional help
Finally, the REBAA president advised prospective buyers to take on a local buyer’s advocate “with intimate knowledge of the area and market” they’re planning on purchasing in.
“(A) buyer’s agent will be able to guide you through the areas which have historically performed well despite the macro economic conditions, and protect your budget,” he said.