Most of us have bought and /or sold a property at some point in our lives, and we know that the real estate industry can be a complex one to navigate. Changing economic conditions, media hype, demographic shifts, interest rates and international relations play a role in how positive the market is for a buyer or Vendor, and when all these elements collide prices in any given area can suffer a significant drop in value. And these changes can alter your financial position positively or negatively and impact one of the biggest investments you can make.
Despite the ebbs and flows of local and national real estate markets, there are certain things about the home-buying and selling process that remain constant:
1. RESEARCH THE MARKET
Although real estate values fluctuate due to local supply/demand dynamics and broader national economic considerations, it's important to remember that the market determines the price. The age old supply and demand concept is as valid as ever. Whether buying or selling, do your research, ask your real estate agent for relevant comparative data points and use a variety of resources so that you're confident in your list or offer price.
2. TIME TO BUY?
If you look at real estate trends over the last century, prices go up and down and we have booms and busts. The buyers who win are the ones willing to ride the wave. Even if you have bought at the peak of the market, dips generally rise again so seeing a purchase through the cycle can pay dividends. Buy when you can, and hold till the sale is profitable.
3. FACTOR IN FEES
There are so many gatekeepers in the real estate market for Vendors and buyers. Understanding all of the fees associated with a sale or purchase (advertising, conveyancing, building inspections, stamp duty) is so important so that you are not caught short or put under pressure.
4. HOME OWNER ADVANTAGE
Although the real estate market fluctuates over time, there's one thing would-be first-time homeowners often overlook. Yes, there are tax advantages. Yes, you paint the walls any color you want. Yes, you build financial equity. But you also have a built-in mortgage control. With a fixed-rate mortgage you'll always know what your house payment will be for the next 25 years or so, and feel confident that the never ending mortgage payments are an investment in your future.
5. LOCATION, LOCATION, LOCATION
Regardless of the interest rate, the economic climate or what the media extols, good locations will always be in demand. Access to public transport, great local schools and a sound infrastructure will continue to outperform the baseline in the long run. Location is certainly the evergreen factor in real estate.
6. BE PREPARED
As a Vendor, ensuring your property is always well-maintained will give you the best chance of a swift sale, even in a slow real estate market. Buyers appreciate houses that look move-in ready and are in pristine condition as opposed to those that need tidying or updating. In a hot real estate market, most houses sell quickly but during a cooler market period, buyers have the advantage and can be more selective. The houses in the neatest condition are the ones that have the highest chance of selling.
7. WORK WITH AN EXPERIENCED LOCAL REAL ESTATE AGENT
The internet has changed real estate forever. Vendors and buyers can access more information about real estate than ever before. However what they can't get online and can only get from a local real estate agent, is that insider knowledge. That local "go-to" agent who is a neighborhood expert knows things about the homes and the community you just can't Google. Their value will never change.
8. NO KNEE-JERK REACTIONS
Selling your home can feel like giving up something you love, so a low-priced offer can leave Vendors feeling insulted. Buyers base their offer price largely on their own financial circumstances, and often as part of a bidding game. Most likely they will be prepared to consider raising their offer - if it is a competitive market, if the location is just right, if it's an emotional purchase or if the conditions of the property suits their lifestyle needs. Stay open to negotiations and work with your real estate agent and the buyer rather than turning down a low-priced offer.
9. DON'T BE AFRAID TO WALK AWAY
Some say you make your money when you buy, not when you sell - if you buy right. By being clever about your real estate purchases and using as large a deposit as possible, you insulate yourself from the ebbs and flows of the market. However there is not always a deal to be done so don't be afraid to step away. Sometimes the best investment is no investment at all.
10. BEAUTY IS IN THE EYE OF THE BEHOLDER
No matter what the market conditions are, one aspect always remains the same — the true market value of a home is only equal to what a buyer is willing to pay. Just because a Vendor believes their home is worth a certain amount of money, a buyer will ultimately determine the price which the Vendor can refuse or accept.
For more information, tips, tricks and sounds advice, call Sam Danckert on 0432 444 040.