Millwater & Milldale Property Update
With Mike Pero Real Estate Millwater
As somewhat expected, the property market in Millwater has kicked off again with strong buyer activity. On the other side of the equation we are seeing an ongoing shortage of property coming to market, with most potential sellers citing a lack of options to buy as the reason for not selling. This is exacerbating the supply issue and creating something of a stalemate in the market. We have seen this in previous boom cycles. The solution usually ends up being an acceptance of some risk on the purchase side of the equation as owners realise they cannot secure their ideal property without being in a position to make a cash offer. We have seen three different solutions to this conundrum in the past.
The first and easiest, yet requiring a bit of a leap of faith, is to sell the current property first then find and buy something afterwards. The obvious advantages to this are that you have no pressure during the sales process and can hold out for your dream price. Plus, when you do get around to buying, you already know how much you have to play with. The risk factors are really around not finding a good option to purchase once you have sold and the potential for the market to continue to increase once you have sold and prior to your next purchase.
The second and probably simplest solution for some is to find a new property and ask a bank to help fund the purchase, then sell the existing property. This does require you to be in a reasonably strong financial position as banks will want to see high levels of equity in the existing property prior to agreeing to this. Servicing of the debt is always a consideration, however you may find that banks will see the rental of one or other of the properties as a short or even long term solution should the existing property not sell. This does have some significant upsides in a rising market in that you may end up with two properties that are increasing in value, which at current market levels may be a significant sum over the period that you own both.
Yes there may be some additional costs involved in this. Your bank may be looking for a reasonable loan approval fee to allow this, or may seek higher rates of interest while you have two loans outstanding. The other key risk is around a change in market. Holding two properties if the market drops may mean that you lose value on both, which can in turn land you in trouble with the bank. The reality is that with a market as hot as the current one, there is minimal risk involved but you should always consider this and take professional advice.
The last option, and the one with the highest level of potential stress, is to purchase a new property with a long settlement date, say 90 days from unconditional date, then sell your current property. This does require the existing property to be already prepared to go on the market, but with median days to sell locally now being around 30 there is certainly time to launch a property on the market (2-5 days), run an auction campaign (7-28 days) and then still provide an additional 30 days to settle. This can allow a significant benefit in terms of securing the next property without massive additional costs in bank fees and valuations. Depending on your risk profile this can be achieved without involving the bank, however the safer plan is to have an option to fund both properties in the case the existing property does not sell. This ends up a bit of a hybrid with the previous option.
There are risks and rewards with each of these options. They should all be fully considered when making another purchase. Some will ask what is wrong with making an offer conditional on the sale of your property? While this has traditionally been a common approach, the reality is that many properties are currently marketed in ways that make this impossible. Even if you can find a vendor who will accept an offer of this nature, there is every chance that you will find yourself ‘cashed out’ of the agreement before your conditional period has run its full course. This also means that you are under the duress of having to sell quickly while not getting the negotiating benefit of being an unconditional buyer in the first place.
If you are considering a change of house and want to discuss the various methods you may employ to make it happen, please get in touch for a no obligation chat. Expert information can often make the process easier, faster and more financially rewarding.
021 665 423
About Mike Pero Real Estate Millwater
Grayson and Sarah live and work in Millwater and know the market extremely well. Their clients attest to their enthusiastic and professional approach as well as the high value proposition that the Mike Pero Real Estate brand provides.
Clients appreciate that because they are locals they not only have an in depth knowledge of the current market but also strive to make a fabulous impression by delivering optimum results.
“We are proud to be the business owners of Mike Pero Real Estate Millwater, servicing the area from Millwater to Long Bay and across to Albany."
- Grayson and Sarah
Contact us at Mike Pero Real Estate for more information on residential sales in the Millwater area.
"The dream team strikes again. For the second time we have had the pleasure of having Grayson, Sarah and the team at Mike Pero Millwater market and sell our property. They made the process easy and took care of all of the details for us. The professional photos were fantastic and made all the difference for our online marketing. Second to none, real estate professionals we would recommend to everyone."
Shane & Nicole Woods | Prospect Tce and Skipjack Pass
"My sincere thanks go to Grayson Sarah and Vanessa from Mike Pero for achieving the successful sale of my property in Millwater. Grayson is happy to spend as much or as little time with you as you require to find out all about the exciting but sometimes stressful process of selling a beloved home. No question went unanswered from him - or Sarah and Vanessa for that matter -and they work so well as a team. I would highly recommend them to anyone thinking of selling their home as not only do they achieve great results they have your best interests at heart."
Kathryn Deakins | Blake Greens
"We have used Sarah and Grayson from Mike Pero Millwater on three occasions to sell our homes. On every occasion we received good market information and the final result exceeded our financial expectations. Appointments were always kept and phone calls always returned without delay. Open home feedback was prompt and accurate.
Grayson and Sarah helped us finish creating our retirement fund in under 5 years. We are really happy we were loyal to a fantastic team who always exceeded our expectations."
Mark and Donna Bradford | Madison Terrace, Bartlett Drive and Botanical Drive
Grayson and Sarah were brilliant from the get go - the transparency and communication, including regular updates helped us feel connected to the marketing plan with the end goal always in mind. We felt like we were dealing with real people that understood us and our family needs. Being a part of Maddren Homes and in the business of building/selling homes, professionalism and quality are important to us and with Grayson and Sarah we felt we got looked after every step of the way. They were professional and approachable and we were constantly kept informed - we felt like our home was always a priority and they were focused on achieving a great outcome for us, which they did! We’d recommended listing with Mike Pero, as we would again in a heartbeat. We wish them every success. The kids were rapt their playhouse was even sold. The Anderson Family | Outlook Terrace