How to buy under market value property
Everyone loves a bargain. And rightly so. With property being such a large transaction, saving 5% upon purchasing can make a significant difference to your wealth.
Unfortunately, with the amount of information available on the web, competition from many interstate investors and owner occupiers using their low interest rate debt, buying under market properties has become increasingly difficult.
The principles below, albeit simple, are used by savvy buyers agents and investors to secure property under market value.
- Patience. You don't have to buy any property that you come across and nor do you need to buy now. In flat on down markets, you can often wait for a deal that meets your criteria. Some investors study particular areas for 12 months before purchasing so they can get a strong sense of what a bargain looks like. Stay patient a deal is likely to come.
- Don't be afraid to make offers. Real estate agents are legally bound to show vendors all offers they have received. If you have figured out the price you are willing to transact at, don't be afraid to make an offer. It might just get accepted and can start a dialogue between you and the vendor in case they change their mind about their reservation price in the future
- Going unconditional. In a world where finance has become increasingly difficult to access, going unconditional can entice vendors to lower their price expectations. Too many contracts fall over during the conditional phase, and by having your finances and building and pest inspections ready, you can tell vendors that you are serious about completing. Real estate agents are also more likely to push your offer, given they get paid to complete.
- Build relationships with real estate agents. Most under-market value property comes from distressed sellers that require immediately. By positioning yourself as someone who can complete contracts quickly, you can become the first point of contact when an opportunity arises.