As a buyer, the last thing you want is to pay too much for a property. But how do you know what is and isn’t too much? Do you listen to the selling agent, whose job it is to get the highest possible sale price? Or base it on what a similar property around the corner went for a few months back? Or do you get independent advice from someone who knows what they’re talking about?
The value of a buyers agent when buying
As buyer’s agents, one of our greatest strengths is our ability to accurately predict what a property is worth and the likely sales result.
To do this, we monitor the market closely, study the sales data and read the room, so we:
A – know what the property is actually worth in the current market.
B – can work strategically to secure the property either below or in line with what it is worth.
Sales data
Often when properties sell, sales results aren’t publicly disclosed (for a variety of reasons, but often it’s because the result wasn’t great).
Our industry database contains the sales results of every property sold in Victoria. It provides a complete and true picture of what is really happening in the market and what similar properties are selling for in any given area at any given time.
Reading the room
By attending multiple open for inspections we gain valuable insight into a property’s popularity.
We monitor attendance numbers, eavesdrop on other buyers, read people’s body language and take note of how many people are asking for contracts. This knowledge allows us to be strategic in how we approach the purchase. Do we let it gather more momentum and run to auction? Or should we try to secure it prior?
Using sales data and strategy to secure this hot Fitzroy townhouse
We recently secured this property for clients who were relocating from Canberra. We went to the first inspection solo, along with 15 to 20 other groups. Knowing the property was ideal for them, we took them to the next inspection the following Wednesday. Despite it being a mid-week, mid-day inspection, there were another dozen buyers there who all looked pretty impressed.
As expected, our clients loved the property. The selling agent was quoting a price range of $1.1-$1.2 million.
Based on our analysis of the relevant sales data and history we have in our database and our reading of the room we:
- Predicted that the townhouse would fetch around $1.3 million.
- Knew the current owners had unsuccessfully tried to sell the property with another agent 18 months earlier.
We advised our clients to:
- Set their budget at $1.311 – most buyers have round budgets, and they will rarely go more than $10k over them. By having an odd number, that’s just over a tap-out point, you’re immediately at an advantage.
- Make an offer before auction – after losing the best part of $10k on an unsuccessful sale in 2021, we knew the owners would appreciate the offer and treat it as a bird in the hand.
On Friday morning, our clients gave us the authority to proceed. Knowing Fridays are never a good day to make an offer; we decided to sit tight and instead attend the inspection the next day. There were lots of people there and buyers lining up to request contracts.
We knew we needed to move fast, and we did. This is how it played out:
- Sunday afternoon, we made an unconditional offer of $1,250,000 with a quick settlement and a cut-off of 2 pm the next day.
- The agent responded the next day and advised that they would auction the property early over Zoom at 5 pm that day, with competition from two other parties.
- The auction commenced with us and one other party bidding strong. I felt the third party were waiting to make their move but would only do it when they had to – so I dropped out of the to force their hand.
- After a few bids, the first buyer dropped out, leaving us and the latecomers bidding in $1000 increments.
- As we got close to the $1.3m mark, I could see the latecomers were running out of steam.
- We jumped in with a $3k bid to show strength and unnerve them.
- They came back with another $1k.
- We hit back confidently with a $4k bid that secured the property for our clients at $1.310m ($1k below what we initially advised).
Buy smarter with IPB
Need help securing the right property in the right area at the right price? We’d be delighted to help. Contact us to arrange a time to talk about your property goals and how IPB can help you achieve them.
