The cooling property market has resulted in the creation of an acronym, FOOP, fear of over paying. A year ago, people turned up to auctions and waving their arms in the air prepared to pay any amount of money to purchase a property through fear of missing out (FOMO). We were seeing crazy things happening at auctions. Now, things are vastly different.
People are turning up to auctions, but they are behaving with more caution. In essence, they are wary of getting caught up in a bidding war. It is safe to say, they are now experiencing FOOP – fear of overpaying. While the market is still bouyant, it is cooling. We are returning to a market where there is more rigor in the process of buying a property.
Buyers are getting back to basics and instead of being concerned about missing out, they are taking their time and doing their research to find a property that genuinely meets their needs.
We are seeing a return to the fundamentals – which I believe is a good thing. It means sellers are now having to engage with buyers in a real way and have to be prepared to negotiate and give some ground. If they don’t, buyers will simply move on to another property.
What is there to know about a FOOP buyer?
Here is what you need to know about a FOOP buyer.
What is a FOOP property buyer?
It is someone who wants to buy a property and has a list of conditions but won’t pay over a certain fee because they don’t want to over pay what they think the property is worth.
What are FOOPS buying?
FOOP buyers are buying quality properties with good fundamentals or good potential. They are less likely to buy properties with issues or problems that can’t be solved – unlike buyers over the last two years that just purchased anything for the sake of getting into the market.
How do FOOPS behave?
FOOPS have a budget in mind and they won’t go above that amount. If they find a property but can’t negotiate to purchase it at the price they want, they will walk away and keep looking for something else. FOOP – fear of overpaying buyers are worried about the state of the property market and whether their purchase will appreciate in value.
In summary, FOOPS are very sensible.
How should sellers deal with FOOPS?
We are going to see more FOOPS enter the market and sellers need to consider this new type of buyer. We are working with many FOOPS as their agent to help them find the right home for their family. They know what they want and how much they are prepared to pay.
Our job now more than ever is to leave no stone unturned to find them that dream place that ticks all the boxes – but at the right price rather than just any price. Sellers need to think about how they can make their property more attractive for the FOOP. Is the guided price aligned with up-to-the-minute comparison sales? FOOPs are sensitive to a wrong quote.
Has the home had a freshen up with paint and carpet immaculately presented? FOOPs will nitpick on small blemishes. Expensive strata and building reports are a big hurdles for a FOOP.
Make them easily accessible and free to download. And why not throw in the white goods and garden furniture to sweeten the deal. FOOPS will need more incentives to sign on the dotted ‘buy’ line and sellers need to be prepared for this. The market is changing and will continue to change this year as interest rates rise and inflation edges upwards.
Good quality properties will continue to rise in value, but properties with issues will require more work to sell including realistic price tags, especially when it comes to FOOP buyers.
Dan Sofo is the founder and CEO of Unicorn Buyer’s Agents, and is an expert in the property market trends of Sydney. He is a leading buyer’s agent who helps people to find and purchase the ideal property and his services are in hot demand.