More than 2,000 British homeowners recently said they spend more time buying a pair of shoes than a house. Yep.
And in Australia, it seems we’re also keen to splash the cash on a new home, with about 30% of homeowners saying they made their decision to buy in under two minutes — despite spending between six and 12 months looking for a property.
While we all probably know that in-depth market research is an important part of buying or investing in property, it seems we are impacted by several things at the pointy end of the house-for-sale.
- Emotional attachment
Buying with your heart and not your head. If you feel an emotional connection with a property at inspection or auction, tread carefully! Remember this is probably the biggest financial transaction you will make in your lifetime!
- Lack of research
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.
- Lack of planning
Some people rush in to buy a property because it is cheap or offers what they think is a good potential return on investment. But without knowing the market and having a firm financial plan that considers your lifestyle as well as your investment goals, this could end up being a costly decision.
When it comes to property, impulse buys can prove costly, with buyer’s remorse, overcommitting financially, and paying too much all common mis-steps when it comes to home-ownership.
Oh, and researching your lender is important, too… Making informed financial decisions when it comes to property means avoiding the temptation to rush in and sign up with the first lender that says yes!
Professional finance specialists have access to a wide range of loans and lenders to help you choose the most suitable loan product for your individual circumstances.
Three steps to buying right
- 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 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, and 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 your immediate needs. Ticking boxes (or identifying issues) at every inspection will help keep you on track to finding a property that fits your needs.
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 that 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 including council/water rates, strata levies, etc.
- environmental issues such as flood zones, bushfire zones, etc.
Remember, when attending open homes the real estate agent is there to get the best price for the vendor so will only be acting in their best interests (not yours). It pays to have a finance specialist on your side, so that your unique financial situation is represented at all times.
Doing your research before you start searching for a new home will put you in a much better position to assess if a property really ticks all your buyer boxes.
Talk to us today about your own property investment goals and opportunities.