Understanding the where, what, when and why of buying is crucial. Here’s how the professionals deliver ideal property outcomes for their clients.
When homebuying, a client will have many questions around strategy and timing. They’ll want to know if they should purchase now or wait. They’ll also be keen to understand whether to compromise on condition or shoot for quality. They’ll be eager to understand the prospect of property values rising and how that fits with their plans.
Answering these queries requires an advisor to be across myriad elements and drivers… and there’s definitely no one-size-fits-all-buyers answer!
But there is a process we can follow to make informed decisions – and that’s the “Where, What, When and Why” approach.
To illustrate, I’ll run through a real-life case study of a client who recently asked us to find them a home.
The big four questions
The buyer in this instance was a family with definitive set of criteria. Here’s how we approached the hunt for their home.
- Where are you buying?
We want to understand what locations interest our buyer. This isn’t just to filter the listings. Location also informs us on the seller and purchaser demographics we’ll be dealing with.
Our clients wanted to buy in Paddington, Red Hill, Bardon or Ashgrove. These are all upwardly mobile to affluent areas in Brisbane’s inner-west. Home prices are well above the Brisbane median and competition is relatively strong for certain types of property.
- What are you buying?
The clients were looking for a minimum three-bedroom, two-bathroom home with a great open-plan living area and a pool. They wanted an elevated property that could catch the breezes and undesirably positions such as on a main road or adjacent to a busy retail outlet were definite no nos. They also had a budget of around $2 million to spend.
- When are you wanting to buy?
The importance of when is that urgency can create desperation. Also, the “when” helps us analyse market conditions now so we can form an opinion about the direction of prices and sales activity in the future.
Our clients were renting, and their lease was due to expire in five months. They ideally wanted to secure a home within that timeframe.
- Why are you buying?
By understanding the why, a buyers’ agent can be certain they’re seeking the ideal property for your needs. The “why” also allows us to discuss property options the buyer may not have even considered.
In this instance, the client’s “why” was about lifestyle. They wanted a place of their own where they could do things to their home without requiring a landlord’s permission. They also had young children and were keen to get them settled in a home that they could grow into.
The pathways to ownership
These clients had a couple of burning questions they needed answering.
They wanted to know whether they should buy now or wait to see if prices would soften over the next few months. They also asked whether it was a smart plan to acquire something that needed renovating so they could create their ideal home through construction rather than looking for something already done.
Because I had their when, what, where and why answers, I was able to give my considered opinion based on several factors.
I knew the supply/demand dynamics of the client’s chosen property types, price point and locations. I knew their budget was about right, but competition for good property is relatively strong on these suburbs. Owners in this location and market sector are typically less effected by interest rate increases, for example. They tend to be financially astute and will have factored in potential rate rises, so there was a lower likelihood of finding a “distressed sale”
I also looked at the dynamics of renovation and, again, local knowledge is key. I knew that renovation prospects in these suburbs would still be priced around $1.3 million to $1.5 million. Then, depending on the specifications and size of the build, the cost and construction timeframe might not suit them. In my client’s case, a renovation would probably take longer than five months, so they’d need to sign another six or 12-month lease in all likelihood.
I also considered how prices in this market segment might behave as the year progresses. In this instance, I expected prices to stabilise during the year and perhaps even strengthen. The prospects of them falling too much further seem limited based on the available evidence.
In the end, I felt they had a window over the next five months to find a home that would tick most of their boxes without the need for immediate or extensive renovation work. A full renovation would only add risks and challenges to their homeownership plans.
They were in a fortunate position in that prices should remain fairly steady over their five-month timeframe. This meant they could take their time choosing a property. Other buyers in this market are still a bit cautious about interest rate rises and economic uncertainties, and that’s good for my clients because competition will be subdued.
As you can see, knowing the answers to those big four questions gives us a wealth of information as buying experts. Armed with this knowledge, we can help our clients secure the right home in the right location and within a timeframe that suits their needs.