Why property buyers overpay (and how to avoid it)
In this article Mr. Cohen explains the top five reasons why buyers are overpaying in the current property market and shares some tips on how to avoid common traps.
Buyers bid with their hearts, not their heads
The top reason buyers overpay for property is because they develop an emotional attachment to the property; they fall in love. Once you let emotions overtake reason, you can find yourself compromising on other key factors you originally valued, such as price, location or size.
Instead of visualising yourself and your family in the house, take a step back and look at it for what it really is – bricks and mortar. Ensure it meets the criteria you started with and if it doesn’t, remember there will always be more property coming on to the market.
Irrational purchases aren’t backed with adequate research
In an increasingly competitive market, fear can often drive purchasing decisions, rather than logic. It may seem obvious, but failing to conduct in-depth research about a specific property is a fundamental mistake made all too often by enthusiastic buyers.
The property market is currently booming in Sydney and Melbourne, which can cause buyers to make on-the-spot decisions. Ensure you understand the area you are buying into, including comparable sales and access to amenities, and work through a process to avoid spontaneous decision making.
The cost-conscious aren’t seeking professional advice
Whether it’s engaging lawyers to review contracts, building inspectors for a building inspection or a buyer’s agent to negotiate pricing, by cutting back on the cost of professional services, you can in fact end up paying too much for a property.
These services can add to the already daunting cost of buying a property but poor purchasing decisions can have even more significant consequences down the track – like expensive repairs for a termite infestation!
Read the full article here