It is always difficult to buy at a fair price and on your terms in a rising market, particularly if you are just “one of the crowd”.
A large number of our clients come to us because they are sick of spending valuable weekends at open homes only to continually miss out on properties.
It can be a soul-destroying process which leads to the average person either giving up or continually increasing their budget, adding to the bidding war and eventually overpaying.
Even worse, they are happy to lower their expectations and settle for something they would not have initially even considered.
As a professional property buyer, I am here to tell you that there can be a better way!
We are generally finding about one in three of the properties we are purchasing for our clients off-market and I am happy to share with you some of the secrets behind how we do that.
But first let’s start from the beginning…….
Whether you are an investor or buying a home, I suggest you initially take a step back to understand what you want to achieve and how to best execute that strategy.
I suggest you use a top down approach;
- Decide which Entity would best suit your circumstance – this will require professional assistance, particularly if you decide a trust may be the best option. It is also something you should decide on prior to obtaining finance.
- Talk a to Financier to understand your borrowing capacity and get a Pre-Approval in place – this will give you piece of mind and allow you to make offers with full confidence and potentially shorten contract conditions.
- Once you understand what you can borrow, then decide your comfort level – the banks may say you can borrow $1mil, but y9ou may not be comfortable at this range.
- Now you have a Budget you can put a property strategy together
So many people make the common mistake of following this strategy in the opposite order, they start with the property first and then worry about everything else later.
Imagine being successful on your dream home or that perfect investment only to have it fall over as you were unable to obtain finance or later discovering you may have purchased it in the wrong entity.
Not to mention it could cost you thousands of dollars.
So, you can now begin to earmark preferred locations to target that fit your requirements and your price range and be ready to buy with confidence.
From here you should start to look at previous sales in nearby streets, attend up and coming Auctions and open homes to get a feel for those markets.
Buying off market
As you start to attend Open Homes and Auctions, agents will become more familiar with you and as you are required to register for open homes will likely be in contact to seek feedback and interest.
This is an ideal time to start forging new relationships as they are the key to buying off market.
There are several ways you can do this, in fact I have written an entire article dedicated to exactly this.
You can read it by clicking here
The agent will usually always represent the sellers best interest as that is what they are paid to do, but if you can form a relationship with the better agents they will be happy to assist you.
Once they understand your requirements, I would suggest following up each week with a phone call early in the week to see if they have anything else coming up.
When I say weekly, I mean weekly, if it becomes fortnightly or monthly and you will fall from the front of their mind to the back.
It may not lead to an off-market purchase but you may get a look at the property a few days early and prior to it hitting the open market to get a head start.
In some cases, we have inspected a property on the Tuesday and already wrapped it up prior to the first open home.
Which leads to my next point – It is also essential to understand why the vendor is selling.
There are a number of reasons people may want to move and in general there may not be great motivation to sell, these are generally harder to secure pre or off-market.
Always look out for responses where motivation may be high;
- “they have bought elsewhere and need to sell”
- “messy divorce”
- “deceased estate”
Other times it may something as simple as a little old lady not wanting people trampling through her house at open homes every weekend.
I have recorded a short video below to give you an idea of how it has worked for us.
The purchase was made off-market for an investor in New Farm, one of Brisbane’s hottest suburbs.
We did exactly as I suggested and followed all the points of The Strategy process I have outlined above.
I will share with you our “property strategy” and the outcome that followed.
Buying a property off-market or pre-market does take some extra time and effort, but it can be a great way to make a purchase without comprising or overpaying for a property.
However it is important to put together a strategy to start with to understand what it is you want and to ensure you can act quickly and with confidence if need be.
Identifying local markets and lead agents within those markets and then forming a bond with those agents will assist you to have access to every property on or off the market.
By putting in that extra little bit of work it may just get you into the perfect new home or a great investment property to add to your portfolio.