7 Ways to find houses with less competition…
How can you be smart in this market and purchase a home for a good price? The key is finding a property that is poorly marketed, limiting the amount of competition you will be up against.
Here are a few strategies which will help you find houses with minimal competition from other buyers.
1. Look for houses with limited or bad photos.
Nothing puts off buyers more than bad photos. You know the ones I mean – the kind you see on private sales or rental listings. Salespeople should always encourage owners to invest in professional photography, but sometimes they just don’t want to do it (You can find examples in every town and suburb on trademe).
Some salespeople seem to enjoy taking photos on their iPhone and don’t even bother to straighten them or brighten them up. If you can see past these slightly wonky, dark photographs you might just find a gem that no one else bothers to visit.
2. Look for houses with tenants.
It’s tough on tenants when a house is for sale. There is usually nothing in it for them aside from hassle, inconvenience and the looming threat of sale to someone who wants to give them notice to move out. Unless owners are pro-active in offering a rent reduction there is little incentive to tidy the home and “de-clutter” and this shows in the photos (putting off your competition).
Tenants without incentives will often be very choosy about viewing times and may not allow open homes. This will put off even more buyers who aren’t able to get out of work during the week to see the property and will reduce your competition even further.
3. Look for properties that aren’t on trademe.
Pretty rare these days but a small number of owners choose not to invest in having their property on every individual website available which means you need to be checking all the top sites to make sure you are seeing the whole market.
According to Nielsen ratings, the top 3 sites for property in NZ usually are: trademe.co.nz, realestate.co.nz & harcourts.co.nz. Not all properties for sale go on all 3 sites. Specifically – make sure you checkout realestate.co.nz as there may be houses on there that aren’t showing up on trademe. Crazy I know, but some people just don’t want to spend any money on marketing.
Note: Some spec homes and new-builds will not be listed on trademe. These properties are often advertised with a set asking price and sometimes sell within days of going live on sites like realestate.co.nz. I can’t imagine why you would do that if you owned those properties but if they choose to market that way then you might as well benefit from it!
4. Look for houses listed by an ‘out of area’ agent.
Sometimes owners list their property with a salesperson from out of the area because of an existing relationship they have with that person or because they have bought a home through them in their area. That salesperson is unlikely to have a database of potential buyers waiting for that kind of home and they are unlikely to be familiar with recent sales in an area they don’t normally operate in.
They are also likely to live 20-30 minutes drive away and won’t want to go back and forth to the property for hundred’s of viewings, which (if the agent isn’t committed) could result in the property being sold quickly, to the first buyer who walks in the door with a decent offer. This can provide you with an advantage and can mean less competition if you get in quick.
5. Look for houses that have been on the market 2/3 months or more.
Sometimes houses stay on the market a long time because there is an issue. A building problem that needs fixing or a non-consented addition can slow down a sale. Often though, good houses can stay on the market a long time just because the owners expectations were too high to begin with. It’s as simple as that.
Do your homework and make sure you sight a builders report before going unconditional but don’t be put off a home just because it has been on the market for longer than expected. Viewings drop significantly after 3 weeks on the market so you will have a heck of a lot less competition if you target properties that have been on the market for over a month.
6. Look for houses where a previous offer has crashed.
When a cautious buyer gets a home under contract (eg their offer is accepted subject to a builders report) they usually aren’t ready for how bad the builders report will sound. Some building inspection reports read so badly they can talk you out of buying a brand new house. Once an offer has crashed because of a builders report it can scare off other buyers, meaning less competition for you.
If the offer was accepted at Tender, then by the time it crashes – often the buyers who had the 2nd or 3rd highest offer have since gone and bought something else, again limiting your competition. Sometimes the issue(s) which scared the first buyers off can be something pretty simple to fix – like a new roof, some piles that need work, or similar.
You will often find you have far less competition on a house which has small issues, so if you are prepared to take on the work you might be on to a good thing. Make sure you get your own builders report (don’t buy a lemon), adjust your price according to the work required, and snap up your new home!
7. Look for houses where the owner hasn’t provided a LIM or builders report.
When owners provide these reports up front it makes it easier for buyers to offer. It removes hurdles from the process. If you can find a home where there is little to no information available it could give you an advantage. This sort of property may still attract competition if it is well marketed otherwise, but it is likely that most of the other offers will be conditional, especially if you are competing against first home buyers.
My recommendation is to complete you own due diligence, get a builders report, check with the Council and if it all looks good, make an unconditional offer and separate yourself from the crowd. Owners will often accept the 2nd or 3rd highest offer in a Tender if that offer is unconditional (and the ones above you are not), even if it is $5k or $10k lower. Especially if you attach a letter as well!
These tips might just help you find that hidden gem in our rising real estate market that is moving fast.
Always remember though – it’s worth buying a house that other people want. If other buyers are offering at the same time it’s a good sign. It shows you have good taste and it means the property will be easier to sell when it comes time to move 3,4,5 years down the track. So don’t avoid the popular homes if they suit you!
Click here to read how to make your next offer more attractive so yours can stand out in a competitive situation.
Note for potential sellers: Obviously (it goes without saying) you will want to avoid falling into all the traps above. You get one chance to achieve the best possible result for your biggest asset.
Till next time,