Home buying myths for the property hunter.
So much of real estate is taught to you through your influence circle. Surely you will have heard one million and one ideas on how to negotiate a sale or how to deal with an agent. There is no steadfast right or wrong answer when it comes to this, however there are some myths that need to be debunked in order to do deals the right way. Today we present home buying myths 101, and how not to fall victim of other peoples opinions.
Myth 1: You should never pay the asking price before auction:
It’s been very rare in the past to see homes selling before auction. One reason this has been is a reluctance of people to make an offer before the auction and wanting to ride it out at auction. With auction clearance rates north of 80% becoming a common theme, it seems most homes are selling. Therefore, you may find yourself actually paying over the reserve come auction day because someone just wants it more. This can cost you tens of thousands of dollars. If you have done your research and can establish how much you think the home is worth, it can be worth putting in a conditional offer that expires. This will provide a deadline and a decision for the vendor to make.
Myth 2: You need to buy in peak market seasons:
A lot of property buyers look to buy in Spring and Autumn, the two strong seasons for realestate. What this does do however is position you against a lot of competitors who are thinking the same thing. A serious buyer needs to be looking to buy ALL THE TIME. You can’t plan your buying around market seasons, you should know what it is you are looking for, and if it comes up in the middle of winter, on a gloomy day, you should know about it and be engaged in the process. Homes look better in spring and autumn, however the right home looks good always.
Don’t miss out on homes like 9 Gordon Street, Mosman because of the negotiation process
Myth 3: All deals are negotiations:
A concern for prospective buyers is that they think a purchase should involve a long and engaged process from multiple parties. On the contrary, a serious home buyer should be certain on their limits and serious on all offers. Once offers are rejected and new ones are put forward, you leave yourself in the position to not be taken seriously; A good buyer should very clearly explain to an agent, this is my budget. I can’t move from this amount because, this is exactly how much I can be loaned, and how much debt I can burden. If that price isn’t right, be willing to walk away.
Myth 4: You’ll always lose out to a cash buyer:
Buyers have long thought that they will lose out to cash buyers because of their immediacy in being able to pay. A good buyer will recognise this but do everything in their position to counteract it. If you go in to an auction being pre-approved and with 20-30% of the total amount, you put yourself in as good a position to be taken as serious as any other buyer out there. Don’t be scared by buyers who claim ‘cash is king’ you can compete, just don’t get intimidated.
Ultimately, the real estate market is filled with many myths. There are so many people who hear that this is the way realestate is, and never question it. If you are a serious buyer, do your research and realise that you aren’t limited by your circumstances. There are always ways you can overcome competition and challenges in the market, but you need to think outside of the square and be as organised as possible when it comes to auction day.