Buying property in a mixed market

purchasing or selling a property in a buyer’s market. It will be an incomplete analysis to leave it there, as some properties are actually in a seller’s market where demand is outweighing supply.
There has been a notable increase with house prices on the market and demand has grown especially for properties commanding lower prices, as more people become liquid.
The time frames on the market for properties below US$100 000 has reduced significantly compared to trends found at the beginning of the year, with lesser open market time for those properties below US$50 000. This observation is based on those properties that are fairly priced.
It has come to my attention that several sellers are receiving market appraised offers on their properties and have actually benefited from semi- bidding processes, in some transactions achieving a price higher than the initial asking price.
Most serious estate agents presently have several potential buyers in their diaries looking for good properties within this range. There are notable tips to follow if one is looking for a property within a price range and area that could possibly be experiencing a seller’s market.
After having decided the specific areas that one intends to purchase in, it is advisable to ask your estate agent about the market trends within that area taking into consideration the funds available.
This helps to eradicate possible misconceptions or mistakes that are likely to be made later on in the offer process. It is human nature to always hope for a bargain, however, in a seller’s market especially at lower priced (high-density to medium density) properties, one has to be very open with oneself about how much they are willing to get the particular property.
If the property is priced fairly or a bit lower than market value, to give a low-ball offer is irresponsible and in most cases results in the person making the offer loosing the property. The most common human error in real estate buying is the misconception that one is the only person currently with the cash or capacity to purchase the particular property.
This common error has resulted in many potential buyers losing their first choice properties. It is an ironic reality that some people live in their second choice property which they paid more for than they would have if they had offered what the purchaser of the preferred property had offered.
If the agent has advised that the particular property one is keen on might be in a sellers market, then time is of the essence. Be the first to move, put up a fair market offer slightly lower than the asking price.
Do not allow yourself to get entangled in a bidding war, it is best to put on the offer a timeline which the offer is valid for, three days or less. This will put the seller under pressure to either accept or reject your offer before other potential buyers see the opportunity and make higher offers.
One of the best advantages a buyer can have, especially one who has the potential to be confronted with a bidding war is to create a rapport with the seller.
It is not uncommon that some sellers reject other offers because they “feel” like the person they have created a rapport with is best suited for that particular property. Understanding the needs of the seller can add an advantage to the buyer.
Find out the reason for sell, is it that the seller is retiring, in a cash crisis or moving up?
One strategy to try to ensure a sale is to include both monetary and non-monetary offers. For example, buyers are often attracted to a property that has tenancy terms, such as allowing the seller to remain on the property in part or whole as a renter over a predetermined period.
Any innovative way that can assist the seller further especially after understanding their reason for sell is a bonus and ensures in most cases a guarantee on being accepted as the preferred purchaser
One has to try to learn and understand what the seller wants from the sale other than money. Those who are new to buying often think that making an offer is as simple as putting forward a dollar amount to the seller.
In fact, buying a property, especially one that is in a seller’s market, is an act that requires innovation and skill.
l Vengai Madzima is a property consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected]