Newcastle Living Magazine
Knowing Your Options In A Changing Property Market
Whether you’re buying or selling real estate, it’s important to understand what market you’re in when making your decisions. Many factors make our market behave differently, and we’ve witnessed this happen time and time again here in Newcastle.
We haven’t experienced a declining market for some time, and Newcastle in general doesn’t have the significant drops we’ve seen in other major Australian cities. However, we still have times when property prices do correct and plateau. In Newcastle, there is always a high demand for brick and mortar as well as land (people love a family home with a backyard). The category really goes in one direction: up. Most suburbs in the region have seen steady double-digit growth year after year.
“You’ll find in this market that auctions are far more common as sellers understand the market is driving the price up.”
Whether it’s a rising, stable, or falling market, having your finances organised gives you the ability to act quickly, giving you an edge on other buyers. This applies whenever you’re looking to buy, regardless of the market. It dramatically improves your capacity to negotiate and act swiftly. However, a buyer needs to follow some basic principles to get in the game, or they can find themselves left behind.
It starts with finances. It’s essential to make sure you have a large enough deposit and your bank is prepared to give you money to purchase in the time frame a typical seller will want to settle. Understand your limit and try not to push over that limit, as this can slow down the overall process.
There are a number of factors that are obvious when shopping for a property. You’ll find in this market auctions are far more common as sellers understand the market is driving the price up, and there is a chance for them to get even more than they were hoping for. There is generally not a lot of property for sale, and some suburbs may have nothing for sale, which can be maddening. Short supply makes it hard for anyone buying property.
Additionally, there are lots of buyers. You will find this at open homes when you are asked to queue up to view a home, or an agent seems too busy to be able to spend time with you because there are buyers everywhere. This can be very frustrating, and it can be challenging for the agent to manage so many people. So learning to cope with simply getting the information required to make a decision from the agent as quickly as possible is a skill you’ll want to master.
Get comfortable negotiating when you find something you like. Rarely will your first offer be accepted, so get involved in the negotiation process to understand how it works. You’ll most likely find some agents are great to work with and others a challenge. Work through the process to make sure your offers are formal and are in writing, and politely ask for a response so you know where you stand. This way if it’s not for you, you can then move on to the next one.
Once you have negotiated a price, get the property exchanged as soon as you can. It’s not yours until a contract has been signed and exchanged, and many people suffer disappointment thinking they have quite a bit of time to think about it.
Take advantage of the cooling-off period. Once you exchange on a property, it means you can breathe and slow the process down, giving you five business days to make sure you are happy to proceed. Be mindful sometimes if there are multiple buyers, agents may request a contract not to have a cooling period, just like an auction. Understand what this means and be ready for the discussion if it comes up. You will need legal advice on this, as your lawyer is the only one that can waive your cooling rights.
For sellers, a rising market is an exciting thing. It’s an opportunity to get more than you were hoping for on a property. You could get quite emotionally involved in the process, especially if you’re selling by auction as you don’t really know what you’re likely to achieve.
There’s quite a build-up to the day of the auction. The difference between an experienced and inexperienced agent can be tens or hundreds of thousands of dollars. The process to get the most will change from property to property and from agent to agent. Think about this carefully, when you’re selling you only have one chance to get the most.
In a balanced or declining market, it’s a very different world. There is plenty of stock to choose from, and buyers can take their time looking. At open homes, you may find yourself the only person there and the agent giving you plenty of attention – sometimes even too much.
If the market is declining, sellers should consider listing with an agent who’s been through tougher markets and understands the importance of nurturing relationships with buyers. They know how to make sure no stone has been left unturned and allow you to consider every offer when it comes in.
Often people buy and sell in the same market, finding themselves on both sides almost simultaneously. This results in enjoying the selling side in a rising market and hating it as a buyer. In a declining market, you’re rubbing your hands together as a buyer while chewing your fingernails as a seller.
Regardless of the market, it’s essential to pick the right person to sell your property. You need to know they can manage the sale professionally and empathetically understand your needs and follow your directions. Or if you are inexperienced, take the lead with your approval, of course. Buying and selling are big life moments and it’s our pleasure to help you on this important journey.
Contact Darren Penn
Director and Principal Licensed Agent
Ph: 0424 740 463