Not even a recession induced by a global pandemic can put the brakes on Australia’s property market, which is booming as house prices grow at the fastest rate in 17 years. If you’re selling in this market, the odds are very much in your favour.
Buyer demand is at an all-time high and with no sign of property prices slowing down anytime soon, (at the risk of sounding like a real estate agent) there really is no better time to sell.
Here are some things you need to know about selling in a property boom.
1. Make sure your home is well presented for sale to attract the best price
Most of the usual selling advice applies even in a property market boom, such as making sure your home is well styled and presented for sale so that it can attract the best possible price. You may want to consider freshening up your home’s curb appeal and the exterior by repainting, gardening and landscaping, which are all proven to add value.
For the interior, style your home for sale by decluttering, rearranging the furniture, or even hiring a professional styler to come in and make your home look worthy of being on the pages of a magazine. Don’t forget to hire a good real estate photographer to present your home in the best possible light.
2. Ask for an appraisal so you know how much you have to spend on your next property
If you’re selling and buying in the same market, you’ll need to know how much money you will potentially have to play with on your next property. Because property prices are rising, you may need more money than you thought to secure your next house. This is why it’s a good idea to ask your real estate agent for an appraisal.
An appraisal is an estimate or an opinion about what your property is worth based on what’s currently happening in the property market.
3. Go to auction rather than private treaty
It makes little sense to sell your home via private treaty in the current booming conditions. You’re much more likely to get a higher price for your property if you take it to auction where multiple groups of bidders can compete and drive the price up.
In this current market, some properties have been selling for hundreds of thousands above the reserve price at auction.
4. Consider a longer settlement date
Many sellers are currently finding themselves stuck in a catch-22 situation of whether to sell first because property prices are surging, or buy first because there’s such limited stock on the market.
The catch-22 situation of buy or sell first isn’t new, but in this booming market many sellers are afraid to sell first because they’re worried they might not be able to buy back into the market because house prices are surging so fast, and buyer demand is rapidly rising.
To avoid being caught out and having to rent until you buy a new home, it’s wise to push for a longer settlement period. Many sellers are currently pushing for settlement periods of up to four months in the current market to give them extra time to find a new place to live.
5. Be well organised with pre-approval for your next home
If you’re selling and then buying, you should make sure you get pre-approval from your lender before putting an offer in. Because properties are getting taken off the market so quickly, vendors will look more favorably on offers from buyers who already have finance in place.
Pre-approval is the best indication that your lender finds your financial situation acceptable and is an important step to take before you go house hunting or make an offer on a property.
We recommend getting a “full assessment” pre-approval because this will give you a much better answer to the question “do I qualify for a home loan?” than a system generated pre-approval.
A “full assessment” pre-approval is where the lender’s credit experts do a full assessment including looking at the documents you supplied and getting a credit check from an independent credit agency. The lender will talk to you and ask you questions about anything they want to clarify and will potentially ask for more information on your finances.
This type of pre-approval can take a few days to be issued but it will save you a lot more time when you eventually come to seek final approval of the loan. It means that your lender has invested significant effort in assessing your financial position and is still willing to proceed to the next step.
Get pre-approved by starting a home loan application today.