With the property market being so incredibly competitive in Melbourne, buyers are racing like never before to snap up a property. Many thought this unprecedented high in the market would’ve swung by now, but have only been left worried they’ve missed the boat. While this year may see some curb in price growth in certain markets, buyers rushing to secure a property in a competitive market make many errors along the way in their purchasing journey. In my experience as a Real Estate Agent, and a Buyers Advocate, I have seen the same common errors made time and time again. With this in mind, I have compiled a list of the top 5 errors buyers make when purchasing in a competitive market.
Undoubtedly, emotions plays a huge part in the property markets’ expense growth.
Generally speaking, people who are purchasing a home for their families personal use are likely pay more for the property than an investor. The simple reason is because their purchase is driven out of emotion. Becoming worried that they will miss out on the ‘perfect’ property, will cause some buyers to ignore rationality – and their budgets! This results in over capitalizing on a property because of fear driven decisions.
Alternatively, an emotional purchaser often buys a property in an inferior location out of fear that the properties in their preferred location are out of their reach. With the emotions and fear driven decisions in play, they are left with the notion that any property is a good property, so long as they are in the market. The market however, doesn’t work like this, and that second-choice property will always be a second-choice property.
2.Delaying a purchase in the hopes the market will swing
There will always be those who decide to wait for the market to swing in their favour. The issue that arises with this approach, is that investment quality properties in the city are unlikely to be a part of those dips in the market. Instead, the probability is they will continue to rise in cost because the demand is continually increasing. This in turn, leaves those who have held out for a swing in the market, further behind than when they begun.
3.Purchasing out of stress
Purchasing a property in the competitive market that we currently have in Melbourne, can cause even the most seasoned buyer to sweat under pressure. Without expert advice from a knowledgeable professional, many people make impulsive decisions, in which they over capitalize and go against their own financial best interests.
4.Anticipating a steal
It could be said it is unreasonable to expect a steal while still securing a sound investment. As far as supply and demand goes, so long as there are investment quality properties on the market, there will always be a highly competitive demand for them. So long as there is demand, you will never find them at dirt-cheap prices. Money is made in property when the right property is bought. Not the cheapest property.
5.Not getting professional advice
Understanding everyone’s role in real estate is important in securing your own best interests. Real estate agents have a legal obligation to obtain the maximum price for the vendor. Having a buyers advocate working for you and your best interests will ensure a leveled field for a secure financial investment.
In such a competitive market, there are a few key points to think about when purchasing a property:
- Don’t be discouraged if you don’t secure one particular property. Stay optimistic and keep searching for an alternative.
- Do research on the market in the area you are purchasing in, and be prepared to purchase quickly. This means having your finances in order before making an offer.
- Make strong offers, and do it quickly. We are in a sellers market, and low-ball offers will not secure a purchase.