This blog post outlines important features of a declining property market.
An understanding of the current market dynamics will provide property buyers with the opportunity:
- to access more quality properties,
- face less competition,
- to negotiate a lower buying price.
DON’T BELIEVE THE MYTH ABOUT LOW STOCK
Contrary to popular belief, there is plenty of high-quality property on the market at the moment.
The confusion arises because many sellers are now choosing to sell their properties off-market rather than auction. These off-market properties do not appear on the property listing websites and so stock ‘appears’ to be low.
Although this property is available, it’s not listed on popular real-estate websites like realestate.com.au.
In a declining market, the auction process is not necessarily the best process for sellers hoping to realise the highest possible sale price. Sellers are asked to invest significant money upfront when selling a property by auction. Costs include marketing, interior design, and minor renovations. Therefore, sellers are very cautious.
They are dipping their big toe in the water rather than diving into the water via an auction.
The end result is that sellers are turning their back on auctions and opting to sell their property off-market instead.
A FRACTURED MARKET MEANS MORE WORK (AND LOWER PRICES)
This fractured property market poses problems for property buyers.
It’s no longer as easy as whipping open your laptop on a Saturday morning and typing your favourite suburb into the realestate.com.au search bar.
It’s a lot more work and a lot more time-consuming. However, if you do the work the payoff is huge.
Now, each real estate agent, in each suburb of Melbourne, has their own private list of sellers.
HERE’S HOW TO DO IT
There are no shortcuts.
You’ll need to build relationship networks with real estate agents and property developers across Melbourne.
As mentioned, off-market properties are available through private networks, such as local real estate agents or property developers. Generally, these properties are sold without a public listing and are not openly advertised.
Here’s the equation –
- A real estate agent has an exclusive relationship with a seller
- There are many real estate agents in every suburb of Melbourne.
Therefore if you want to access off-market properties, you’ll need to build networks with real estate agents and property developers.
For example, let’s assume that each suburb has 4 main real estate agents. Let’s also assume that any sensible buyer would be searching in a number of suburbs surrounding the suburb you’ve identified as your target – let’s say your search extends to 10 suburbs. That means that you should be establishing relationships with 10 x 4 = 40 real estate agents.
After you’ve established your network of real estate agents you’ll then need to consider property developers.
WHAT TO DO NOW
Knowledge provides power and power provides energy.
We hope that the information in this blog post will provide you with enough energy to hit the pavement and establish your networks.
Alternatively, if you’d prefer to get our help, call Jim at 0417-505-851 for a FREE 15-minute strategy discussion.
We have extensive networks of real estate agents and property developers that have been established for decades.
We look forward to talking with you.