…The stamp duty concession cut-off

I met with a delightful couple some weeks ago. Their brief was simple – but it wouldn’t be easy. They had a goal to find a three bedroom home in Newport or Altona North but they were capped at $600,000.

Like every other first home buyer who is keen to take advantage of the stamp duty concession, they couldn’t exceed $600,000.

Our State Government’s offering for eligible first home buyers has had an effect on property, particularly in the $550,000 to $600,000 range. Like any incentive with a cut-off or a date, it can skew sales results because buyer behaviour will change to suit the circumstances.

My conversation with them at the onset highlighted the importance of moving swiftly, and being prepared to see properties with market values of around $570,000 sell for significantly more due to pent-up competition and demand from first home buyers.

Like any $550K+ brief, our lovely new clients were not immune from this challenge and we agreed to search hard and move fast.

This gorgeous one-of-two three bedroom, two bathroom townhouse hit the market with an auction quote range of $540K+ and when I fielded the excited call, I knew this property would be a first home buyer magnet. Just as agreed, our clients sent their email and text through that very same Saturday they saw the new listing. We knew that moving swiftly could make the difference between a handful of competing buyers and a street full. I inspected the property with them again 48 hours later and the inspection confirmed my thoughts on value.

I appraised this property at $600,000 based on comparable sales.

So what to do? While we inspected, another first home buyer couple were also inspecting it and requested a contract. We had to move fast.

A swift contract review over night and a robust strategy discussion enabled us to move forward with an offer by 9am the very next day. We didn’t try for less or position ourselves for a negotiation.

We signed up an offer of $600,000.

The agent’s response was “well, that’s a strong move.” Indeed it was. We knocked out our competition with one swift offer at everyone’s stamp-duty-concession limit. Had we offered $590,000 or even $595,000, the likelihood of someone beating us would have been incredibly high. I’ve seen it before at auction. I’ve done it once myself; laid down a killer bid of $600K as my opening bid. This strategy is bold and it relies on comparable sales analysis being spot on.

Our lovely buyers can look forward to moving into their new home in Mills St Altona North in February 2016. Being a tiny walk from one of the best delicatessens in the area is the next exciting tip I can share with them. Altona Fresh Fine Foods is a favourite of mine and boasts one of the best cheese selections out there.

And aside from exploring the area, discovering the beautiful Newport Lakes, sampling the deli and making plans for their new home, they can enjoy Christmas knowing that there are no more inspections or heartbreak properties to face.