Buying a House in a Property Boom

An article by Paul    Comments Off on Buying a House in a Property Boom

When prices soar, so does the power of the home seller in the housing market. At its peak a property price boom can mean offers are accepted on houses within hours of coming onto the market. It’s a time when asking prices aren’t just met but often exceeded in the top regions. It truly is a time buyers fear.

These tips will help buyers make the best of negotiating through a house price boom:

· Analyse the local market. The house price boom could be mixed. While in some regions, certain residences may be flying off estate agents’ shelves, in other areas people could still have problems selling. Find out the regions where prices are still low. Maybe there are too many flats for sale. If so contemplate a flat rather than a house.

· Avoid sealed envelopes and bidding wars. During a sellers’ market estate agents will attempt several tricks to ensure their clients achieve the maximum benefit from a house price boom. These include joint viewings to heighten the atmosphere of competitiveness. The worst case scenario is a sealed envelope technique, in which many different buyers make an offer which they believe will seal the deal. This can typically finish up way above the asking price.

· Build relationships. In a sellers’ market a buyer has to stand out. Not just in terms of being able to meet an asking price, but to appear more favourable to the seller. First time buyers and people that have already sold a home are appealing to a seller. They speed up a sale and by not being in a chain the risk of a deal failing is reduced.

· Be ready for disappointment. It is vital not to pin your hopes on one property.

· Stick to your guns. Do not be tempted to borrow more than you are able to afford. Establish a maximum figure you are able to go to and stick to it. During a house price boom some people can take on too much debt.

· Think about buying at an auction, where prices could be cheaper. However be prepared to perform a good deal of work on a home bought at an auction, as properties that come up are generally in need of renovation.

· Bear in mind, prices do not go up forever.