Just when we all thought the major challenges of COVID were behind us, Sydney and Melbourne are caught up in another lockdown. Now, it’s even harder for buyers to navigate the market with changes to open homes and the return of online auctions.
So, how do you stay ahead of the game?
The first weekend of the Sydney lockdown proved that imposed changes are making an impact, with clearance rates down approximately 20% and sale prices also down across the market.
While the process of buying during a lockdown isn’t new, uncertainty is still proving a challenge. Add into the mix the fact that winter brings a shortage of housing stock, and things are up in the air.
On the upside, low auction clearance rates and falling prices could see buyers get a little bit of power back. If you’re looking to buy a property during lockdown, here’s what you need to know.
Compare Home Loans with Canstar
The comparison table below displays some of the variable rate home loan products available on Canstar’s database for first home buyers with links to lenders’ websites. The products displayed are based on loan amounts of $350,000, $400,000 and $500,000 at 95% LVR in NSW, available for principal and interest repayments. The results are sorted by comparison rate (lowest to highest), then by provider name (alphabetically). Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loans comparison selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
Open homes are out
While checking out a property without hundreds of other buyers is certainly a win, trying to get a scheduled viewing makes it harder for prospective buyers even to get their foot in the door.
Capacities are down, so vendor agents are doing everything they can to make the most of every person that steps foot into the home. That means that buyers with pre-approved finance and those with connections to the agency through a buyer’s agent or a history of purchase are generally getting preferential treatment.
Changes to open homes also means that only one person can view the property at a time. Even couples will have to split up. This can make it hard to ensure you’re on the same page, and some critical issues may be missed.
If you’re looking to buy with someone else, make sure you talk through everything you’re looking for in the property first. Getting a buyer’s agent on side can also help you pick up on things you may miss during the limited viewing time and can potentially help you get your foot in the door in the first place. You will have to pay a fee for this, though.
Learning to navigate online auctions is crucial
As someone who’s attended and bought at hundreds of auctions, I can tell you that nothing can quite prepare you for an online auction. Technical difficulties and bugs alone are a considerable challenge. I’ve faced pre-registration issues, log-in challenges and even screen freezes mid-auction.
Then you have to think about the psychological side. You can see who you’re bidding against at in-person auctions and use tried and trusted strategies to assert yourself and ultimately secure the property.
Online, things are very different as you may not see who you’re up against, and it’s harder to stand out as a formidable opponent. You often don’t even know how many people are registered.
Try to build a strong relationship with the vendor agent before auction. Being in contact with them during the auction can help you navigate technical difficulties and ensures your bids are always heard.
Consider making an offer prior to auction
Recently, it’s been notoriously difficult to purchase pre-auction. Vendor agents not only love the crazy sale prices, but it also works as a marketing tool. But with the lockdown changes and things moving online, now may be the time to consider putting in an offer before auction.
Be prepared to move quickly and have all of your ducks in a row. The offer process can be just as stressful as an auction, so planning and organisation are essential.
→ Related: 5 tips for making a pre-auction offer
Tips for buying at online auctions
Here are my top tips for online auctions:
- Make sure you have the phone number of the agent saved in your phone so that if you have technical issues they are only a text message away.
- Have a pen and paper handy so that you can write down the bids.
- Be in a quiet space without any distractions.
- Don’t make up your maximum bid as you go along, as depending on the program used, your competition may still be able to see your face and you can’t be on mute.
- Because it’s online, you will be asked to transfer your deposit electronically, so if you’re asked to do a direct deposit you have to ensure you have lifted your daily transfer limit with your bank in advance.
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