Are you feeling apprehensive about entering the current real estate market?
You are certainly not alone!
It is natural to feel a sense of FOOP. That’s the ‘fear of overpaying’ for a property.
However, with a limited supply of property coming onto the market in Brisbane plus healthy buyer competition, a shift of your FOOP mindset to maybe a little bit of FOMO thinking is what might be necessary now for your offer or bid to beat the competition.
Let’s start with the market.
Interest rates are putting a squeeze on buyer activity. Ten interest rate rises have not only scared buyers when making buying decisions, but it’s also slowed the market, with many areas seeing prices come back.
Brisbane is performing better than the other capital cities with price falls only minor. But that’s the macro look at the market.
If we dive into the micro markets, we see a varying picture. Some outlying suburbs are experiencing price reductions where interest rates have more influence on buyers seeking their dream homes.
But more affluent areas closer to the Brisbane CBD where interest rate increases, while being taken seriously, are not affecting buyer demand as much.
Fortitude Valley is one such area where demand is still strong for the good-quality property. It’s a desirable area, close to amenities, transport, shopping and entertainment thereby making properties very much in demand.
But there are limited opportunities to purchase.
Available stock is in short supply thereby creating competition between buyers to snap up a property quickly.
Fortitude Valley is one such suburb where FOMO is real.
Enough with the acronyms. Let’s define what these phrases are.
What does fear of overpaying (FOOP) mean?
FOOP is the fear of overpaying for a property, usually caused by market uncertainty. The buyer is concerned about paying more than what is fair value for the given area.
In times of rising interest rates, there are pressures on house prices to fall.
True in a macro sense but as we mentioned above, buyers need to consider the micro market.
What does Fear Of Missing Out (FOMO) mean?
This occurs when buyers feel like they are missing out on good opportunities due to stock shortages or competitive bidding.
The current real estate market in Brisbane could be a great opportunity for buyers to adopt a healthy FOMO approach rather than FOOP when making their buying decisions.
With interest rates having little impact on some areas, there are still desirable properties which can be bought at fair value – even in the current market.
So far, we’ve only looked at how FOMO affects buyers. What can sellers do to help their property sell quicker in an uncertain market?
Fear of missing out in marketing
This can help sellers to get more buyers through the door and increase competition.
By highlighting desirable features, such as location, size, or potential rental returns, sellers can market their properties as an attractive opportunity – one that will not be around for long.
By triggering FOMO in buyers, it helps them make decisions faster by becoming emotionally involved in the purchase.
By using FOMO marketing techniques, sellers can help create more competition for their properties, which may result in higher sale prices and faster sales.
Fear of missing out examples
Examples of using FOMO in marketing could include:
- Advertising a limited number of properties available;
- Hosting unique events to attract potential buyers;
- Creating urgency by offering deals that expire on a certain day; and
- Highlighting the benefits of buying now, such as tax relief or reduced interest rates.
Let’s be specific.
501/455 Brunswick Street Fortitude Valley
Marketing this property
- The sellers understood that pricing was key after the hot market of last year – they didn’t want to fall into the trap of overpricing, knowing it would lead to disengaged FOOP buyers. This was an important conversation that the agent had with the seller and it lead to the setting of the all-important back-end price on REA
- The sellers took the advice of Hutton & Hutton’s marketing team who recommended that two of the images be enhanced with virtual furniture, creating more online interest.
The copy reflected three different types of buyers who’d find this property worthy of making an offer.
In other words, this was a very targeted campaign and a ‘one-size-fits-all approach would not get the desired outcome for the seller.
Hutton and Hutton are very focused on achieving the best outcomes for their sellers.
- Their agent, Peter Hutton, recommended an ‘Offers Over’ campaign, knowing that this creates something more tangible for buyers to understand and helps to develop FOMO, thus getting them excited in the current market
- The property went straight to market as a premiere listing on REA, to attract the highest number of buyers in a given timeframe.
Hutton and Hutton know that the strongest buyer interest occurs within the first two weeks of a property being launched. Getting the message out has to be big. This is not the time to go ‘soft’ on a launch.
This is why Selling Loud is a vital part of the strategy in any sale at Hutton and Hutton.
Did buyers turn from FOOP to FOMO on the property?
They certainly did!
The campaign on REA achieved 400% more views than other similar properties on the market.
SOLD in just 3 days!
As the Brisbane real estate market’s limited supply of new listings continues to turn buyers from FOOP to FOMO, buyers need to keep an open mind and remain vigilant.
Investing in the current market requires careful research on locations and prices to help secure the best deals for future returns.
Buyers looking at properties can work with an experienced real estate agent who will provide current market analysis, pricing assistance and guidance when making purchasing decisions.
Buying real estate needs not only a macro approach but an understanding of the micro markets within. Not all areas are the same.
Today’s market is not all about FOOP. There are plenty of FOMO situations occurring in the real estate market.
Finally, real estate should be a long-term buy, not a speculative play. Time will balance out FOOP. Sellers will generate more offers on their property in a shorter period of time if they use FOMO marketing techniques and Sell Loud.