The Biggest Mistake I See Home Buyers Making That Can Cost Tens Of Thousands
In This Week’s How's The Market | Edition 75
The Biggest Mistake I See Home Buyers Making That Can Cost Tens Of Thousands
“If You Make Any Offer I’ll Present It To The Vendor”
NAB Boss Says Rates Are Nearing Peak
The Biggest Mistake I See Home Buyers Making That Can Cost Tens Of Thousands
Purchasing real estate can be tricky and there are lots of complexities that can come along with doing so.
Not to mention, most people will only purchase a handful of properties in their lifetime so it’s not like the average buyer can become proficient through experience.
Plus, real estate agents receive ongoing training in order to make them as persuasive as possible.
All in all, the odds aren’t stacked in the typical buyer's favour.
However, the most expensive mistake I see buyers making across the board is not truly understanding their brief and what they can afford with their budget.
Before I explain how to overcome this problem, it’s worth understanding why it is a problem in the first place.
The reason…
Underquoting.
It’s easy to misunderstand what you can afford as it is common practice in the inner Melbourne marketplace for real estate agents to provide price guides to homes that are hundreds of thousands of dollars below what the home is worth and the vendor would even accept.
Whilst this is extremely frustrating, it is a part of the culture of the marketplace and I can’t see it changing anytime soon, so I would rather prepare you for how to deal with it.
This can cause problems for home buyers as they create their brief by looking at what is on the market in their price range.
This will result in them liking properties they cannot afford and unfortunately, I have seen many couples that are still trying to secure properties years later that do not sell above the range due to too much competition.
If you fall into this category and you are still looking 12 months later, you also need to consider that you have paid an additional 12 months in rent, the market may have increased and your borrowing capacity may have decreased leaving you in a worse position and potentially costing you tens of thousands.
So I want to help you avoid this scenario and get you into the best property you can afford sooner!
How do you do this?
Step 1. Speak with a mortgage broker and get a pre-approval.
Step 2. Open realestate.com and type in the suburbs you are interested in, then click on the Sold tab.
Step 3. Click Filters and input the ‘must-have’ criteria you are looking for, your max budget and select ‘sold in the last 6-months’, then click search.
Step 4. Click Map so you can see all the properties on a map and go through all the locations you would like to live in as well as the properties that have recently sold.
Based on the properties that have sold in the last 6 months, within your desired suburbs and within your budget, create your property brief.
Look online for properties that are similar to those that have sold in the last 6 months within your budget and try to ignore those quoted within your price range that are scheduled to go to auction.
This can save a lot of heartache and potentially wipe months off your purchasing journey.
Feel free to contact me and I can help you put your brief together free of charge.
What The Agents Are Saying
“If you make any offer, I’ll present it to the vendor”
I’ve had multiple agents call me recently and start to sound a little desperate as I can tell they are trying to get properties sold before Christmas and the year is disappearing very quickly.
I believe many agents would have made promises to sell properties before the year is over and they are now looking as though they will not hold true to their promises.
Based on my conversations with agents, there are only a few more properties set to come online this year with some agents listing properties to intentionally go against the grain and soak up the Christmas eyeballs.
My suggestion, if you are still in the market looking, is to go out and network with agents on the weekend and ask if they have any properties off-market that you can inspect.
The Wow Factor!
1/655 Victoria Street, Abbotsford, Vic 3067
The top two floors of an epic art-deco warehouse apartment in Abbotsford.
Incredible views and large wide open spaces certainly make this property feel unique.
Price Guide: $5,700,000 - $6,200,000
In The Media
NAB boss says rates nearing peak ahead of Reserve Bank decision
I low pointing out when the banks get it wrong, which is quite often.
The head of NAB came out the day before the interest rate was held this week stating he believes there may be one more rise in the next 3 months.
I am glad to be able to say that the interest rate was held on pause again for the December rate decision.
The RBA will meet again next in Febuary which means we have a pause of a month before we will hear from them again where they will also be able to analyse how the Christmas and holiday spending affects inflation.
Final Thoughts
Buying a property can be difficult.
Real estate agents and undequoting do not make it any easier.
My biggest piece of advice to anyone looking to purchase a property is to create your brief based on properties that have sold within the last 6 months in your price range.
You can do this with realestae.com
If you would like help creating your brief, feel free to reach out and we can jump on a call and I can help you at no cost.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
