Having just returned from a speaking gig in New Zealand where I addressed 250 agents there, I was amazed that they were in fact in an entire different real estate world. Literally a few months earlier they were experiencing the same market conditions as us, a buyer’s market, yet when I arrived to address them, what I learned was that they were reporting a shortage of stock, days on market down to 10 days in some cases, and a seller’s market was the reality now.
Yet earlier in 2012, a total different story.
I was thinking that this can happen anytime in Perth too. I see buyers getting cuter and cuter; the term I have been using is “growing horns”. I think some buyers enjoy too much what they think it is an environment where they can say and do anything. In my 10 year career I can’t remember them being as willing to make 24/7 demands, remind you that is a “buyer market”, be willing to lecture and pontificate to the agent, yet still not make an offer in some cases, or if they do, unrealistically low.
I recall one buyer offering me $1Million on a property marketed at about double that, due it being on the market a reasonable period. I like to answer, if the buyer waits long enough on that logic, it will be free.
When I was disinterested in playing the games with that buyer, he then said, alright then, $1.7M?
When asked if he would write that up, the buyer refused. It was to him, a game. (fair enough, buyers can do that, then sellers and agents can too).
Another buyer recently, when saying he will offer $600,000 on a property offered to market at “offers over $699,000”, was asked, if his offer due to wanting a discount off the asking price or what he thinks is fair?” We asked, “If it was $600,000 would you be offering $530,000?” to which he said , “yep”.
Is it any wonder many owners refuse to put asking prices on properties, and many agents find it hard to take these buyers seriously.
I like to remind buyers that even in a buyer’s market, there still needs to be a willing buyer and a willing seller. Value is and always has been established by comparing “apples for apples” in a recent market for sales evidence. A recent sale validates value and ensures buyers can buy with relative confidence. (Assuming the market is stable). I do find that both buyer and seller each use “comparable sales” that suit their own vested interests however. (both as much as the other).
My views of buyers and offers in this market is this.
1) If you like the home
2) If you can afford it
3) Make an offer
4) Try to buy it
5) Make a first reasonable offer to increase your success chances
Good agents will never do “hypothetical or verbal” offers, so the only way to know you can buy it is to write an offer.
If that offer is way too low, it will be seen as “playing games” and probably treated in kind by the agent and the seller.
A genuine, fair and reasonable offer will usually be treated in kind as well.
I just say to buyers, sure it is a buyers’ market now, but like in the New Zealand example above, things can change very fast. (So don’t sit back too long if you want to buy).
Already in 2012 volumes are up and stock levels lower, reaching at State level a form of equilibrium in the market.
There will always be people that need to buy, from interstate and overseas transfers, trade up and down buyers and first home buyers. Western Australia is well placed to continue to prosper, and I think it is dangerous to be so cute as a buyer right now waiting for that elusive fire sale bargain, that you miss a really perfect home that is available at a fair price rather than a bargain.
We have sold as much in the past 5 months as any time in the past 10 years, and right now things are moving in numbers and volume of sales. Whilst I am not saying prices are rising, I am saying properties are moving.
The rest is inevitable. The big question is when? So if you are buying, the time to jump in is now.
Thank you and see you in the market place.