First home buyers and investors are facing off when it comes to buying a desirable property.
According to recent research conducted by Mortgage Choice, both investors and first home buyers tend to be attracted to the same type of property and thus both buyer segments are facing stiff competition when it come to purchasing a property.
Why Property Investors Are Winning
Unfortunately, in many instances, investors are beating first home buyers to the punch and securing the property.
There are couple of reasons why investors are able to secure a property over a first home buyer. In the first instance, investors are often more flexible with their finances. As such, if it comes down to a price war, investors can often afford to pay more for the property – beating first home buyers out at the 11th hour.
In addition, many have been through the home buying process before and know the ins and outs. This gives them a distinct advantage when it comes to negotiating on price.
How First Home Buyers Can Prepare For Battle
The good news is that there is hope for many first home buyers who are feeling frustrated with the hyper-competitive Australian real estate market. One option that you have when you want to purchase your first home is to expand your search area to include outlying suburbs. These areas are not as competitive, but it is important for you to be aware that you could be facing long commute times. This may be a viable tradeoff depending upon your living circumstances and requirements.
Another option that you should consider when you're buying your first home is obtaining a mortgage pre-approval. To get a mortgage pre-approval, you will provide your mortgage broker with all of the financial paperwork needed to apply for a mortgage. Using this information, the broker will help you determine whether you can reasonably expect to be approved for borrowing, and they will also be able to give you an idea of how much you can expect to borrow based upon your income, household expenses, debts and other financial information.
Sellers are more willing to accept offers from people who have a pre-approval. Pre-approval is more appealing because it means that the transaction is more reliable and therefore more likely to go through without complication. Getting pre-approved for a mortgage loan is well worth considering as it can give you an edge on the competition when you're shopping for a home. In today's difficult property purchase market, every edge is valuable.
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