How to buy a home in a sellers’ market
Tuesday, May 27, 2014
A buoyant property market is great if you've got a property to sell, but it's really tough for house hunters, who increasingly find themselves pitted against each other in a bidding war…
What's going on?
In a nutshell, there aren't enough properties coming on to the market to meet the demand. This means, when a property becomes available, there's much more competition to buy it, which pushes up prices - it's not unusual for people to now offer significantly more than the asking price.
Open house means open season
High demand is resulting in more open house viewings - where a group of potential buyers all look around a property at the same time and are then often asked to submit a sealed bid. While this works well for estate agents and sellers who want the highest possible price, it puts extra pressure on potential buyers who have to make big decisions quickly.
"30 couples viewed a property in 20 minutes"
First-time buyer Kirsty Kelly, who works for a marketing agency, has been house hunting in Bristol and knows at first hand the stress that today's home buyers have to cope with: "We've done the open house thing. Last week, 30 couples viewed a property in the 20 minutes I was there. You are pressured to make a full and final offer after looking at a house for just a few minutes, and then wait and see if your bid is successful. We've had our hopes raised and dashed so many times and now we try not to get too excited when we see a house we like as the chances are, someone will out-bid us. Every time I get a call from an estate agent I go through a rollercoaster of emotions."
Feeding the frenzy
Angela Kerr of the HomeOwners Alliance confirms open house viewings are happening across the country. "It can feed a frenzy to some extent," she admits, "but I think it's something that's likely to continue." However, it's hoped that the new Mortgage Market Review, which includes a mortgage affordability check, will encourage buyers to stop trying to out bid each other and will calm the situation down.
Help available, right here!
If you're trying to buy a house, or know someone who is, our new property-buying guide is packed with useful tips -including how to find out about properties as soon as they become available, how to make the right offer, choosing a solicitor, arranging a mortgage you can manage - and how to avoid being gazumped!
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