Mistakes Home Buyers Make – and how to avoid them
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.
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.
The Right Market Research
Putting down a prior offer or attending an auction can put a buyer in a disadvantage position, this could see you paying more for a property then what it’s actually worth. If a real estate agent agrees to a prior offer, it could indicate that you are the only potential buyer for that particular price. By doing this it could expose your budget and could potentially be used against you and other potential buyers, to ensure that the selling price will be a lot higher, regardless if it is a public auction or a private negotiation. If you choose to negotiate on a property yourself read ‘negotiating on property price’ article.
It’s vital to have a rock-hard understanding of the market value of the property, and keeping in mind that the price will not always equal the value of the property. You can feel quite disheartened when you discover that you have paid a lot more for a property then the going market value, purely because you did not undertake the right research, or you became emotionally attached to the property.
The correct research is the key to negotiating an appropriate price for both parties. If you do not have the time to undertake the correct research, consider a Buyers Advocate to help undertake the whole process for you.
If you decide to put down a prior offer, it is crucial to offer it at the right time. If you decide to give an offer days before the auction, it is less likely that the agent will accept the offer, unless they have not received any interest from other potential buyers. If you decide to put down an offer, put it down as soon as possible, as this will save both parties the stress of an auction process.