There’s a lot of talk about rising interest rates, and I thought I’d share with you my thoughts on this because…
Where there’s change, there’s opportunity… But…
The opportunity may not look like what you think it will look like!
There are a lot of agents out there who haven’t been in these markets before. Many will have trouble selling their stock.
So what will they do?
They’re going to drop their prices!
And quite rapidly.
They’ve got to.
What does this mean to you?
You want to look for real estate agents who have no idea. Agents who haven’t got a proper pipeline. Haven’t got the contacts. Haven’t got a database.
Those are the agents that are going to be the most desperate.
Which means YOU can snag some opportunities at a bargain price from them.
However, to find those opportunities, you really need to understand the market. You want to buy under market value, right? Well, you need to have good reference points to know what the current market value is!
Otherwise, you can’t tell whether you’re buying cheap or not. You can’t tell if it’s an opportunity or not.
And while prices are dropping… you’ll also experience less competition!
With every change in the marketplace, there’s always less competition.
At least for a short while. If you’re not prepared, you’ll miss it.
If you haven’t got your finances ready… or you haven’t got the entity ready… or you don’t know what strategy…or you don’t know what suburb you’re working in –– you’re just wasting your time.
You really got to get yourself organized.
There will be a lot less competition over these coming months, and you don’t want to miss this timeframe.
People won’t be as trigger-happy as interest rates continue to rise in the next six to 12 months. Their money will be more expensive, it will get harder to get.
Another thing to consider is, that those who paid too much in the last 6 to 12 to 18 months will be revealed soon.
- Some will be in a hurry to sell because they can’t afford to hold their properties anymore.
- Some won’t come out of the ground because they can’t get pre-sales.
- Some won’t get finance.
- Some won’t get the approvals they need to make their project work (for example, they might need 5 blocks out of a project to make it work, but can only get 3)
And again – in their desperation to sell lies your opportunity. As long as you know the market and you are prepared to grab these opportunities as they come.
You’ll definitely have to get more creative if you’re a seller.
I’ve sold in very tough markets before. Every month as interest rates go up, the market drops further and further. So it’s time to A) get creative and B) sell as soon as you can. Sooner rather than later. Because with every interest rate increase, you will be getting less and less money.
And if you’re buying… Realise that it takes time for sellers to adjust their expectations fully.
If something was selling for $700k and now it’s selling for $600k, if they’re not motivated or desperate to sell, why would they sell for $600 grand? You got to be mindful that even though the market has come back, sellers will be waiting for that “right price.” The majority of them will wait for it.
You want to find the 5% to 10% needing to sell NOW.
And you know what’s better than a motivated seller?
A desperate agent!
Agents still need to make their mortgage payments, car payments, etc. Especially if they’ve upgraded to an Audi or Mercedes Benz on debt over the last few years – as many of them have. And they will be pushing their clients hard to meet your lowball offers.
If you can find a desperate agent with a motivated seller… you’re golden! : O )
So if you’re in a situation where you can buy or invest in the next 6 or 12 months, I suggest you get your wallets ready. Get your checkbooks ready. Go to a bunch of auctions and get a feel for the market. And start putting in those lowball offers.
If you want my help with all that, check this out:
Until next time!