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How to avoid paying too much for a property

FOMO (Fear of missing out) is out and it has been replaced with a fear of overpaying. If you’re looking to purchase a home, you may have noticed that the market has become a balanced playing field for buyers and sellers.


Where buyers were previously rushing in to snap up homes and paying higher prices in the process to avoid missing out on properties, this mentality has now changed.

FOMO (Fear of missing out) is out and it has been replaced with a fear of overpaying.

Some buyers are aware that they no longer need to overextend their budgets to secure a property. Instead they have become wary of paying too much.

So how can you buy property with confidence and ensure you don’t pay more than you should be?

1. Do your research

When you’re in the market, you should be researching the areas you’re interested in. You can do this easily online where there is a wealth of information at your fingertips. Carry out searches on suburbs and find out what similar properties are selling for. Make sure you’re comparing apples with apples so look at specific elements including block sizes and number of bedrooms and carparks. You should inspect multiple properties as this will help you work out a fair price for a home and the factors that could affect it.

2. Avoid emotional attachment

Buying a home is an emotional process and it is easy to become quite invested in a property. However, this can easily cloud your judgement because if you have fallen in love with a home, you’re more willing to pay extra to secure it. It’s okay to like a property as long as you remember to keep a level head. Remind yourself that even if you miss out on a property, there will always be another one.

3. Set a budget and stick with it

Before you start searching for properties, you should find out what your budget is by getting a home loan pre-approval through your Mortgage Choice broker. A pre-approval is a confirmation of how much you can borrow from a lender and it gives you a clear indication of what you can afford to buy. You should stick strictly to this and only look for properties within this price range. If you’re buying at auction, keep your limit in mind and avoid bidding above it.

By having a good understanding of the market and not extending yourself beyond your budget, you can buy a home confidently knowing that you’re not paying too much.

Your Mortgage Choice broker can assist you by finding out how much you can borrow and they can also help you with your research by providing suburb scorecards.

 

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Posted in: Home loans

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