Listing levels across Perth are down to below 11,000 houses, apartments and lots for the first time in several years. By contrast, this time last year there were close to 16,000 listings. The fall in listing stock has been quite dramatic, falling by 600 listings in a month.
There are several reasons for this including a general lack of new stock coming into the market over the past five years during Perth’s market downturn. Most notable is buyer demand is comparatively high as property sales volumes are outpacing new stock coming into the market for the first time in more than a decade.
These current conditions are beginning to push up property values in certain markets due to buyer competition for the more desirable homes. As a result, buyers are finding themselves offering to buy in competition with others.
Agents have differing approaches as to how to deal with multiple offers but normally will inform buyers that their offer is one amongst others. When a property is offered for sale by private treaty, details of competing buyers’ offers are not normally revealed so as a buyer offering in competition with others, it is difficult to know what price and conditions will ensure purchasing success without paying significantly more than the next highest offer.
Buyers should remember that agents have a legal responsibility to act in the best interests of the seller unless it is unlawful or unethical to do so. They are paid to ensure the buyer pays the highest possible price on the best possible terms.
One of the most effective ways to achieve this and discharge their fiduciary responsibility is to have multiple purchasers competing to buy.
My advice to buyers is to always ask the agent if there are any other current offers on the property before submitting your own offer. Agents are not obliged to say that there are and this knowledge might influence your initial offer.
Believe the agent when they tell you there are other offers in play. Buyers are prone to thinking the agent is telling fibs in a bid to encourage an offer but that’s not typically the case.
The notion that agents should assume the buyer’s first offer is not their “best offer” is nonsense. A buyer who tells the agent that this is their best offer should not assume the agent thinks it a lie and remember that the seller is under no obligation to provide you an opportunity to negotiate further. And being told your offer was one of many, choosing not to submit your best offer and missing out ought not to give rise to blaming the agent.
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