5 experts home buyers need to know about By Nine, Westpac & SSB
The property market has been surging in recent months but there could be increased opportunities to buy in 2022 and it’s important to be prepared.
Home buyers have been through a tumultuous year and a half, dealing with lockdowns, virtual inspections, fierce competition and low supply.
Director Economic Research at PropTrack, Cameron Kusher, said property prices and demand have rapidly increased since the onset of the pandemic.
“While demand remains elevated, more stock is currently becoming available for purchase and many people seeking a home will find themselves a new property soon,” he said.
“It is reasonable to expect that there will be fewer buyers in 2022 and although demand is likely to remain elevated, it probably won’t be as substantial as it has been over the past 18 months.”
Mr Kusher said buyers in 2022 can expect a cooling period, as the adjustment to lower interest rates comes to a close.
“People now have more choice to spend on entertainment and travel since lockdowns have ended, and we’re already seeing some signs of cooling price growth, which we expect will continue into 2022,” he said.
The same goes for listings, as Australians can anticipate a strong few months, before the market begins to slow.
“We would expect strong volumes (in early 2022) given that lockdowns have caused many willing sellers to delay bringing properties to the market, which they now feel more confident to do,” he said.
“There is also a federal election due before May next year and historically, elections tend to slow the property market.”
If you’re looking at buying or selling property in 2022, it’s important to have the right team behind you to help you make the right decisions in a busy market. Here are a few experts you might consider engaging to help you through the process.
1. Buyer's agent and real estate agent
A buyer’s agent can help negotiate a sale or bid on your behalf at auction. They can also save you time by doing the groundwork for property searches and even give you early access to properties that aren’t advertised yet.
Their role should not be confused with a real estate agent who works for the seller of the property.
While the real estate agent is paid by the seller to sell and market the property, a buyer's agent is paid directly by the buyer to find a property and undertake any additional services, including bidding on their behalf.
2. Financial advisor
When it comes to making big financial decisions such as buying a home or investment property, a financial advisor might be a valuable resource.
A financial advisor can help individuals or families feel confident in setting realistic short and long term financial goals by recommending strategies to achieve them.
Once you have discussed your future goals, an advisor will prepare a financial plan called a Statement of Advice, which includes how your investments will be managed, the reasons for their advice and lists all fees you’ll be paying.
Before working with a financial advisor, it’s important to have all your relevant information on hand to ensure they can provide the most accurate advice. This includes having up to date records on any debts, current assets, income statements and your average monthly expenses.
3. Mortgage brokers
When searching for a property, it’s crucial to ask the right questions to ensure you get the best value for your home loan.
A mortgage broker works for the buyer and can act as a go-between between banks and other lenders to find the best possible home loan option suitable to your specific needs and goals. Depending on your personal situation and preferences, you might choose to go through a mortgage broker, but you can also apply for a home loan directly through a bank or lender.
You might choose to skip the broker and go direct to your preferred lender. When you are looking to buy, you should start talking to your bank early to ensure you’re ready to enter the market when the time comes. Mr Lali Wiratunga, financial expert at Westpac’s Davidson Institute, says it’s never too soon to start a conversation with your bank to “help ensure a smooth home buying journey”.
“They’re the ones that will ultimately help you secure a loan to finance the property purchase,” he said.
“As a first step, you’ll chat about your current financial situation and property goals, and they will help you find the right home loan for your needs.”
Mr Wiratunga said potential buyers should consider getting pre-approval before starting to make offers on property. This may also be known as conditional approval or approval in principle, and the terms can vary slightly across lenders so it’s a good idea to double check with your bank.
“It gives you a good indication of your budget and the confidence to bid at auction or make an offer as a serious buyer,” he said.
“It’s important to note that this is an obligation-free step that gives you an idea of your borrowing power, but it is not a definitive approval of your home loan application.”
Most pre-approvals are valid for three months, but the time frame can vary between lenders.
“A good time to put in a pre-approval application is when your other credit accounts are in good standing, you’ve saved a deposit and ideally, you’re zeroing in on your dream home.”
Once you’ve found your property, it’s time to get working on the paperwork to seal the deal.
A conveyancer oversees the settlement process by guiding buyers through transferring the ownership of the legal title of land to the new owner during the pre-contract, pre-completion and post-completion stages. This is a non-negotiable part of the home buying process and a cost you’ll need to factor into your budget.
For eager buyers looking to get into the property market in 2022, a conveyancer can act on your behalf to settle the property, prepare and lodge legal documents including memorandum of transfer, and research the property for any issues that need to be addressed.
A conveyancer can alternatively act on a seller’s behalf when dealing with potential buyers and complete legal documents.
Being aware of what is happening in your target market can save you thousands
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