How to Avoid Overpaying for Property in a Hot Market

When the market is moving fast, fear of missing out (FOMO) can push buyers into making rushed, emotional decisions.Bidding wars, multiple offers, and price jumps can make it feel like you need to pay whatever it takes just to get in.

But overpaying doesn’t just hurt your bank account — it can take years to recover in terms of capital growth. Here's how to buy smart, even when the market is running hot.

1. How to Avoid Overpaying for Property in a Hot Market? Do Your Homework on Recent Sales

Why it matters: The best defence against overpaying is knowing exactly what similar properties have recently sold for.

• Pull sales data for the last 3–6 months in the same suburb (CoreLogic, Domain, realestate.com.au).

• Compare only similar properties — same size, land, bedrooms, and location features.

• Adjust for condition and upgrades.

Pro Tip: Don’t use current asking prices as your benchmark — use settled sales data.

2. Set Your Walk-Away Price Before Negotiations

Why it matters: If you decide your max price mid-auction or mid-negotiation, emotions will win.

• Calculate the maximum you’re willing to pay based on your strategy, cash flow, and comparable sales.

• Write it down and stick to it — no “just $5,000 more” creeping.

Example: If your numbers work up to $750,000, walking away at $755,000 is still overpaying.

3. Get a Building & Pest Inspection Early

Why it matters: If you find issues after your offer is accepted, you’ll either be stuck with the cost or scrambling to renegotiate.

• In competitive markets, some buyers arrange inspections before the auction date.

• If issues are found, you can factor repair costs into your offer.

4. Avoid Buying on Emotion

Why it matters: Sellers and agents rely on buyers getting emotionally attached.

• View multiple properties so you don’t fixate on one.

• Remind yourself — it’s an investment, not your dream home.

• Stick to your buying criteria, even if “it’s perfect.”

5. Don’t Chase the Market Up

Why it matters: If you keep stretching your budget to match rising prices, you risk buying right before a slowdown.

• If a suburb has already jumped 20–30% in 18 months, be extra cautious.

• Look for neighbouring areas with similar fundamentals but less recent growth.

6. Use a Buyers Agent (Optional, but Powerful)

Why it matters: Professionals can access off-market opportunities and handle negotiation objectively.

• They work for you, not the seller.

• They can spot overpricing quickly using data.

• They can remove emotion from the process entirely.

• Lock in your free consultation here.

7. Be Auction-Savvy

Why it matters: Auctions are designed to drive urgency and emotion.

• Attend a few as an observer before bidding.

• Have a clear bidding strategy - opening strong, bidding in odd increments, or waiting to pounce late.

• Don’t get caught up in the competitive theatre.

Checklist Before You Offer

✅ Have you compared at least 3–5 recent comparable sales?

✅ Do you have a strict walk-away price?

✅ Have you factored in all costs (repairs, fees, holding costs)?

✅ Are you buying based on numbers, not emotion?

✅ Is this property still a good buy if the market slows?

So how to avoid overpaying for property in a hot market, discipline is your greatest advantage. Buyers who stick to their numbers and strategy avoid the financial hangover that comes from chasing prices.

Remember - the goal isn’t to “win” the property at all costs. The goal is to buy a property that will perform for you over the long term, at a price that makes financial sense.