- Pent up demand could be leading to "desperate" behaviours.
- Days on market for properties dropped dramatically.
- Rushed purchases could lead to overpaying and missed red flags.
The property market is experiencing a strong period of growth with clearance rates high, and time on market tightening up.
Real Estate Buyers Agents Association of Australia (REBAA) recently reported that buyer’s agents were seeing significantly busier January buying conditions.
Concerns were raised by REBAA president Cate Bakos, who said a rush for real estate could be unwise:
If buyers let FOMO (Fear Of Missing Out) bite too hard and buy irrationally, not only could they be paying too much for a property but they could be buying the wrong property.”
The REBAA’s president reaffirmed the position of caution and prudence in light of the increased demand, saying, “Buying safely is paramount and if the situation doesn’t allow, we firmly believe that a buyer is better off letting an opportunity go, than risking a rushed purchase if the proper due diligence can’t be done in time.”
Whether inexperienced or overwhelmed, rushing could mean buyers miss red flags.
According to the REBAA, common red flags likely to be overlooked include:
- zoning issues,
- restrictive covenants,
- electrical and plumbing problems,
- troublesome neighbours,
- expensive special levies, and
- obscure titles.
Going for a low demand strategy was cautioned against, Ms Bakos said: “There are also those buyers who are determined to buy a property that’s low in demand. Their strategy is to avoid competitive situations fearing that competitive conditions spell over-payment but tread carefully as this philosophy can end up costing a lot more than overpaying.”
Buying in a “hot market” might land you in hot water, so it’s no wonder due diligence and old-school patience is the order of the day.