Relocation Relocation host, Bryce Holdaway, explains the 5 common traps that buyers fall into when buying a property.
1. Searching without a need and wants list – starting a search without clearly knowing what you want and then “hoping the ideal property will turn up!” With this approach, chances are you will waste plenty of time and energy and possibly purchasing something that doesn’t meet your needs or is beyond your budget! To avoid this make sure you have a pre-approval in place prior to the search and make sure you have a comprehensive “needs” and “wants” list and refer back to this often!
2. Falling in love with a property and letting everyone know it!! – it’s important to be very strategic on how much information you let the agent know as you don’t want to give away any of your negotiating power. Instead, you should be looking to get out of the agent why the vendor is selling; have any other offers been made, how long has the property been on the market or if they’ve bought elsewhere. This ensures that you gather a better understanding of the seller’s position and motivation and use this to your advantage when negotiating. A buyers agent can help with this as they’re not emotionally attached to the purchase and can use their negotiating experience to capture this key information without relaying to the agent any unplanned buy signals.
3. Not really getting it that the Real Estate agent is acting in the best interests of the seller… not the buyer despite their seemingly “helpful” advice!! The agent is employed by the seller for two main reasons – their marketing skills to attract the maximum number of people to the property and their negotiation skills to extract the maximum advantage out of the buyer on behalf of the seller. Unless you are a skilled and experienced negotiator, chances are that the agent will out-negotiate you every time.
4. Not doing the hard yards – the temptation is to cut corners on your research because you’re sick and tired of giving up your weekends looking at property but this is likely to be one of the biggest financial decisions you’ll ever make so you want to get it right! The better you know the area, the better you will become familiar with prices and importantly you’ll know how to spot great value when you see it!
5. Forgetting about buying costs – remember to add stamp duty and settlement costs into the mix. This is usually up to an additional 5% on top of the purchase price that needs to be factored in when setting your budget.