Who uses a buyer’s agent?

Many people think that it is only the rich who engage the services of a buyers’ agent.

Our client statistics show that the reality is vastly different to what you may think.
• 74% have a budget under $1 million.
• 71% are owner occupiers.
• 81% live in Sydney.

The reasons people may choose to use a buyers’ agent include:
• Being time poor
• Recognizing a knowledge deficit
• Appreciation of the benefits of “buying” experience
• Comfortable with outsourcing specialist expertise
• Desire to avoid making a costly mistake
• Need reassurance and confidence to commit to such a monumental investment

Let me ask you this question – if you were to buy $20,000 in shares, would you do so without specialist advice? Your exposure to risk with property is much greater and the asset is not very liquid, to say nothing of the costs of getting in and out of the market. In short, everybody can benefit from using a buyers’ agent.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Why out-of-towners need expert real estate help.

Here is a little story about buyers from Brisbane and buyers from Melbourne trying to secure property in Sydney’s heady real estate market.

Just before Christmas last year we had a client come to us after finding a property they liked in Rozelle. These buyers had recently moved to Sydney from Brisbane and, although renting in the area, had yet to come up to speed with the local dynamics of this market.

This particular property had ample internal accommodation, double parking and city views, so it was easy to see why it appealed to our clients. HOWEVER, it was on a busy corner, lacked privacy, had limited usable outdoor space and was neither contemporary nor period in style. In short, this was a property that would be difficult to sell in a “normal” property market, particularly as it was of a style that generally does not appeal to Balmain/Rozelle locals.

After evaluating the property, we advised our client that $1.7M was “top dollar”. It had, in fact, just passed in at auction with a vendor bid at that very figure (and two other offers had apparently been made under that figure), however the vendors were hoping to achieve $1.8M. The agent reported to me that the vendors would accept $1.785M and I expect there would have been further room for negotiation if our clients were prepared to pay over $1.7M, however my clients decided to let the property go.

Christmas came and went, then suddenly we hear that the property had sold for $1.8M! A little investigation revealed that the purchasers had a very similar profile to my clients: they were of a similar age, recently moved from Melbourne and also renting in the area. The difference? Our clients had expert advice and avoided paying too much for a property that does not appeal to local buyers. If the Melbourne people had engaged us, they would have saved a minimum $15K – and probably more.

Postscript – our Brisbane people have since purchased a lovely double-fronted weatherboard in Rozelle at a much fairer price! Precisely the sort of property that will be easy for them to sell to a Balmain/Rozelle local when it comes their turn to put it on the market.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

When are prices going to drop?

It seems now that most economists agree that the sellers’ market is here to stay for a while – but why and for how long? This week I went to a property briefing presented by Westpac and gained a greater understanding of the economics of real estate.

One key underlying factor in residential property in Australia is consumer confidence. In a consumer sentiment survey conducted by Westpac in January, 80% of respondents said that they thought house prices would rise this year. Bottom line, if you think house prices are going to rise you won’t feel nervous about buying now, but you will feel nervous about prices going up while you take your time hunting for the perfect home.

Why are consumers so confident? Our trusty Westpac economist pointed out the following market drivers:
• Population growth (migrants and babies are on the increase),
• Under-supply of dwellings (housing approvals have been lower than needed to support this population growth since 2004),
• Affordability (according to economic measures, affordability is not an issue in Australia – despite how you feel every month when you make your mortgage payment!),
• Our current stimulatory environment and the Reserve Bank’s reaction to local and international economic forces (the plan is apparently to remove the stimuli - such as emergency interest rate levels – gradually so as not to impact on consumer confidence).

In short, it looks like we are going to see continued property price growth throughout 2010 – at least until we consumers start lacking in confidence…

For more information on the Sydney propertyt market, go to www.gooddeeds.com.au.

How to decide how much to pay for a property.

As real estate agents, we have a requirement under the Property Stock & Station Agents Act to undertake a thorough analysis when determining what purchase price we recommend a client pays.

There are a lengthy list of factors we take into consideration in order to comply with the Act. Some of which are:
• A detailed analysis of recent sales
• Assessment of the factors that may affect the price people are willing to pay for this property in the current market.
• Is it a property that will attract buyer interest if you need to sell it in a flat market?
• Is there an obvious way that you can add value?

However, there are also factors that are individual to every buyer. For instance:
• How long have you been looking for? Is this the only property that you have found in 12 months that suits your requirements?
• What is your timeframe – own it for 5 years then upgrade, or is this your 20 year home?
• Are you an investor or an owner occupier?

Sometimes you need to pay a premium for a property that is going to suit your needs better than anything else that is likely to come onto the market in the near future.

Sometimes, however, it is folly to pay a premium for a property that is highly likely to drop in value when the market levels off. Knowledge is power and the more you know about the suburb you are buying in, the better decision you will make.

For more information on buying property in Sydney go to www.gooddeeds.com.au