Five Things Buyers Can Do Right Now That Sellers’ Markets Rarely Allow

I had a conversation this week from a buyer who has been sitting on the sidelines since last year, intermittently inspecting property for his first home purchase. He was concerned he had missed his chance, wondering whether it was too late, had the window closed, should he have moved sooner. I told him what I tell most of my clients right now. This market hasn’t closed a window on him at all. Quite the opposite…

It has opened a few doors that simply weren’t there twelve months ago.

It’s easy to talk about a buyer’s market in the abstract, as though it just means “less competition.” What it really means, is that buyers have room to navigate their purchasing differently. They have time to ask for things, check things, and structure offers in ways that would have likely been rejected in a multi-offer scenario in 2021.

Here are the five opportunities I’m adopting for our clients while conditions allow it.

You can negotiate hard on price

In a hot market, my job is often just to help clients move fast enough to secure their target property before someone else does. Price negotiation becomes almost theoretical, and it’s more about ensuring you move at pace to secure the property for fair market value. Right now it’s the opposite. Vendors who need to sell are motivated, days on market are stretching, and a well-reasoned, offer under asking is not offensive, in fact, it’s expected. I’m seeing price discounting being applied broadly, particularly in the middle and upper quartile market price bands across most suburbs.

Due diligence can be thorough instead of rushed

This is the one I think buyers underuse the most. When you’re not challenging five other bidders with a pre-auction deadline, you have time to do this essential work properly. This includes a council planning check to identify potential restrictions, better understand existing overlays, or identify any unapproved works attached to the property. It enables a conversation with the strata manager, not just a reliance on the minutes, where you can ask about upcoming special levies, disputes simmering in the background, or any new issues raised. And it means picking up the phone to more selling agents to discuss some of the anomaly prices within the comparable sales, and determine whether any of the campaigns involved unusual circumstances.

A slower market doesn’t just give you more time. It gives you the opportunity to ask the questions a rushed buyer never gets to ask.

A finance clause is back on the table

In a hotter market a finance clause for a private sale campaign could cost you the property outright. Vendors and agents simply wouldn’t entertain such a clause when there were three other unconditional offers sitting on the table. In extreme circumstances, some ‘finance clause’ offers required a significantly higher offer to tempt the vendor to take the chance on the conditional offer.

If you’re feeling nervous about your lending, or your situation has any complexity to it, you can often utilise a finance clause in a buyer’s market, and it’s a reasonable, unremarkable request in this current climate, particularly for first homebuyers.

Additionally, buyers should not assume that they can’t discuss a finance clause for an auction property. Most vendors and their agents will decline this request, but pending the strength of the campaign, some will consider it. We have secured two auction properties in the last six weeks with finance clauses in place.

Building and pest inspections, subject to

The same applies to building and pest. Rather than paying for a pre-purchase inspection on every property you’re interested in before you even know if your offer will be accepted, you can put an offer in subject to building and pest, and only commission the inspection once you’ve secured the property conditionally. The challenge for many buyers, however, is navigating the sale if the inspection reveals expensive, (and unexpected) issues. A building and pest inspection is not a ticket to further discounting necessarily, but often a motivated vendor will reconsider the price if the buyer is prepared to walk.

Creative terms, including early access

Finally, this is a market where terms can be as flexible as the vendor is motivated. I’ve negotiated licence agreements that give my clients access to a property ahead of settlement, for measuring, planning renovations, or simply moving belongings in gradually. These arrangements need to be documented properly and your legal representative needs to be across every detail, but they are generally far harder to negotiate when vendors held all the cards.

None of this means you should be complacent, or assume these conditions will always be options. Things can move fast for some properties, even in a buyer’s market. After all, it only takes one other interested party to create a competitive situation again. We always recommend buyers take this into consideration and give themselves the advantage from the moment they spot a possible property option. This blog explains how buyers can set themselves ahead of the pack from the first moment.