- February 4, 2017
- Posted by: admin
- Category: Enconomy, Financial goals, Investment Property
A recent survey of 2,000 homeowners in Britain found most people spend about the same length of time deciding whether to buy a pair of shoes as they do deciding to make an offer on a house.
Similar Australian research shows many people spend 6 to 12 months looking for a property but also act quickly when making a decision to buy. The British survey actually found almost 10% of people made an offer within TWO MINUTES of viewing a property.
Is there a cost to a lack of research? We’ll get to that in a moment, but firstly why DO we often make a quick decision to buy? Well, we tend to…
Buy with our heart – not our head
One of the biggest problems for most homebuyers is the emotional attachment to the purchase of a home. When our emotional boxes are ticked we are less likely to see signs that SHOULD spell caution. First and foremost you should see this as a financial transaction – probably the biggest you will ever make – not just a lifestyle decision.
First home buyers can be particularly vulnerable to buying the first decent property they see as they lack experience and are often eager to get into the market.
Buying an investment property? It is even MORE essential to have your head in the game when the aim of your purchase is to support your long term investment goals.
What are the potential costs of a lack of research?
• Buyer’s remorse. You may have to live with your regret for a long time or face the costs of selling and moving.
• Going beyond your budget. When you fall ‘in love’ it’s more tempting to pay more than you can afford!
• Paying too much. Without local research you could pay an overinflated price for the area.
• Value for money. Tempted to rush in because it’s cheap? Why is it cheap? Is it REALLY value for money?
• Choosing just ANY home loan. DON’T rush in and sign up with the first lender that says yes! As your finance specialist we have access to a wide range of loans and lenders to help you choose the most suitable loan product for your individual circumstances.
Know your limit!
Your FIRST STEP should be determining how much you can borrow. Knowing your limit keeps your expectations realistic. The amount you can afford will ultimately define the type(s) of property and area(s) for your search.
The benefits of research
The NEXT STEP is researching suitable areas. We can assist you with this by providing property reports and comparative market analysis reports that provide information on:
• median sale prices and recent sales data
• median rental prices, yield and capital growth
• the demographic profile of the area
• future development and infrastructure planning
Know what you’re looking for
List your desired property features into ‘must have’, ‘nice to have’ and ‘must not have’. Think about your FUTURE as well as immediate needs. Ticking boxes – or identifying issues – at every inspection will help keep you on track to finding a property that fits your needs. But beware of setting the bar TOO high – know when to compromise or recognise what can be improved with minimum outlay.
Pre-approval of your loan
When you’re ready to start your search we can determine the most suitable loan for your individual circumstances AND arrange pre-approval of your loan. Pre-approval indicates to a vendor you are ready to act and puts you in the best negotiating position.
Found a property you like? It pays to know:
• how long it has been on the market
• why the vendors are selling
• when it last changed hands – and for what price
• ongoing costs – council/water rates, strata levies etc
• environmental issues – flood zones, bush fire zones etc
Remember, when attending open homes the real estate agent is there to get the best price for the vendor! As your finance specialist we provide unbiased information with YOUR best interests at heart. Conducting research BEFORE your search will put you in a much better position to assess if a property REALLY ticks all your buyer boxes!