Housing reports this year have tipped back towards a buyers market with sellers cutting prices. There were months this year in the US when as much as 14 per cent were off listings in individual states. San Diego being highest at 20 per cent that was up over 8 per cent from the previous year.
With price growth steadily slowing in most major cities metropolitan areas we are seeing a lot of the price gains over recent years wiped out as the market has somewhat stumbled upon its price ceiling, the limit at which people can stretch to, and sellers are finally responding to it and lower prices accordingly.
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Two of the main factors behind this were affordability and rising mortgage rates. As we all know the market has had to rebound from the crash last decade and steady growth was becoming the norm, but there was a significant rise in the previous two years.
The reasons were fairly obvious as good old supply and demand were at play. With millennials moving into the home buying ages, homebuilders were still playing catch-up with the rise in demand. Also, the follow-on effect of the re-possessions from the market crash meant over 1 million single-family homes were lost to rentals which hurt the homes for sale figures. With a shortage, it left house prices no-where to go but up.
Until now. The last 24 months have been very favourable to the seller, but signs are that the shift has already begun in 2018. Rising shares of on-market listings see cuts, albeit on the higher price points and in the areas that have seen the most growth.
It’s a little early to call this as a countrywide buyers market, but a momentum shift is being seen in individual states. Given the fast pace at which the market has moved upwards in the past two years, this could be a correction back to somewhat of a usual trend.
As more inventory becomes available, you see the sting taken out of market prices and with new constructions comes renewed power shifting back to the buyer. When the market races against a buyer it can lead to a ‘take what you can get’ mentality, but now price points are marked down considerably then bargains are to be had and a good negotiating skill-set would be advantageous.
When it comes to negotiating on your behalf a buyers agent is a trick up your sleeve that acts as a game-changer or to be more precise a game-leveller.
As I mentioned above when the market shifts it represents a chance to negotiate on the price amongst other things. It is at this stage that many people are out of their comfort zone when dealing with sellers or their agents to get the best possible deal.
It matters not whether this is just another investment property, or this is potentially your first home, buying a home is a painstaking process from possibly attending auctions and open houses, doing mountains of research and eventually paperwork, many of these tasks are beyond individuals or families that simply do not have the time to devote to it.
However, rather than potentially missing out altogether on the price cuts, you have the option of hiring someone to deal with everything on your behalf right up to opening the front door.
Unlike a real estate agent, a buyers agent does not have a connection with the seller. Their job is to get an insight into exactly what you want and go and find the right size, the exact specifics and the right price for you and take you right through the entirety of the buying process.
Why Do I Need a Buyers Agent?
Here are five solid reasons why you should engage buyers agent’s services:
1. Advocate for you
Once you have hired an agent and they have been briefed on the specifics they will start to work on your behalf to find your ideal home or investment.
Buyers Agents will have detailed information at hand about the area, price points, information on the suburbs and statistics showing historical price rises and falls in the city. Also, they will know of any planning that may be due to be passed in the near future like shopping malls as these would raise prices which could be a value purchase as well as a convenience purchase. This kind of insider information gives you the edge immediately with negotiations and price points.
3. Gain access to off-market/pocket listings
This is something that you will not get access to unless you are using a buyers agent Off-Market listings. They have the inside knowledge and instant connections with listing agents to know when something is due on the market. If something that fits your criteria is expected to come on the market they can arrange a private viewing and make an offer – remember less competition means the seller doesn’t have multiple bids to consider, ideal if they are looking for a quick sale, you are looking for value and both parties want to move fast.
4. Helping to make informed decisions
Its a good idea to find a buyers agent who specialises in the area you are most interested. That’s is how they mainly operate is to have an intimate knowledge of certain areas. An Area where they buy regularly and know the price points, council regulations, planning permission and what is being approved, is the kind of information you can’t read in a local paper, it comes from experience.
5. Ready-Made Contacts
Through the process of home buying or shortly thereafter you may need the services of the following:
- A Reliable lawyer
- A Building inspector
- A Property manager
- A Builder or handyman
A buyers agent will have details for all of these and more that he/she has worked with recently, so you’ll get cost prices and guaranteed services above and beyond just purchasing the home. Reliability and trustworthiness are further hurdles whereby doing it alone can be risky.
On average, a buyers agent will charge 1.5 to 2.5 per cent plus GST of the actual purchase price. This is not dissimilar to most real estate agents.
If you are a busy person and those kinds of commission figures are not a concern then save yourself the time and arduous research and paperwork by finding a buyers agent, someone in-the-know to cut through the process. It’s straightforward for a buyers agent – Another happy customer is another referral, that kind of marketing is free and better than paying hefty advertising fees for smaller businesses. Many people after using a buyers agent will never go back to DIY home buying.