When the property market is booming, the excitement is real. Imagine buying a property for $650,000 and, within just 12 to 18 months, seeing it jump in value to $800,000. Sounds like a dream come true, right? But with the rapid rise in prices comes a set of challenges that every buyer needs to be aware of. If you want to successfully invest in a booming market, you need to be prepared to handle these challenges head-on.
Top 3 Challenges When Buying in a Booming Market
1. Time – Don’t Wait Around!
When the market is hot, time is your biggest enemy. If you hesitate in making a decision, the market will make it for you. That dream property could slip away, and you might even lose your chance to buy at the price point you had your eye on.
The reality is, in a booming market, prices are rising quickly. What you might have been able to afford yesterday could become out of reach tomorrow. If you wait too long, you risk losing the property to another eager buyer. The key takeaway here: if you find the right property, make a decision fast. Time is of the essence.
2. Terms – Sellers Have the Upper Hand
In a booming market, the seller holds the power when it comes to the terms of the sale. This is particularly evident in places like Queensland, where properties in desirable locations are selling fast.
Normally, buyers have the option of a cooling-off period and a finance clause. These terms give you space and time to confirm your decision. However, in a competitive market, sellers may demand unconditional contracts, meaning you give up your right to the cooling-off period and finance clause. If you’re not ready to meet these terms, someone else will snatch up the property.
The takeaway here: sellers are in control. In these conditions, you need to be prepared to act quickly and be willing to take on more risk to secure your property.
3. The Arrogance of Sellers
In a booming market, sellers can become overly confident. With more buyers than sellers, property becomes king, and sellers know they have the upper hand. This leads to higher expectations, and at times, arrogance on the part of the vendor. They may refuse to negotiate or be unwilling to adjust terms, knowing that there are plenty of buyers willing to meet their demands.
What does this mean for you? It means you need to be prepared for a competitive environment where sellers expect premium offers. Don’t be surprised if negotiations are tough; it’s all part of buying in a booming market.
How to Overcome These Challenges in a Booming Market
1. Be Transact-Ready
Before you even start looking at properties, make sure you’re pre-approved for a loan. This ensures that when the right property comes along, you’re ready to act immediately. Being financially prepared is non-negotiable in a fast-paced market.
2. Be Ready to Make Quick Decisions
As mentioned earlier, hesitation can cost you the property. Once you find a property you like, be ready to make a decision fast. This might involve conducting inspections, doing your research, and talking with your broker and mentor in quick succession. The faster you can make a decision, the more likely you are to secure the property.
3. Take Action – All the Way to Settlement
Buying property is not just about making a decision—it’s about taking continuous action from start to finish. You’ll need to stay engaged with your solicitor, broker, and mentors, making sure everything is in place leading up to settlement. Don’t let up until the keys are in your hand.
Being proactive and staying on top of everything will help you overcome the challenges and come out on top. Action is key in a booming market.
Get Ready to Reach the Top
A booming market can offer amazing opportunities, but only if you’re prepared to act fast and take on some calculated risks. Time, terms, and the arrogance of sellers are challenges you’ll face, but by being transact-ready, making fast decisions, and staying proactive, you’ll be well on your way to securing the property that sets you up for future wealth.
If you follow these strategies, you’ll find yourself at the top of the property mountain, making moves and building your wealth. The key is taking action—so don’t wait for the perfect moment, get ready to act now.
