First homebuyers take heed with overheated prices

First homebuyers take heed with overheated prices in rush back to the market
In the post-election scramble back to the property market, buyers, particularly first homebuyers, must be careful. Do not fall into a trap of paying an overheated property price in the fear of missing out!

Buyers must learn from previous mistakes made as the heat returns to the property market.

The recently released CommBank Home Loans report reveals that one in five homebuyers handed over much more than they had initially budgeted on their last property purchase. The report discovered that property buyers simply panicked in the face of competition; scared they’d miss the boat if they didn’t act quickly. First homebuyers sometimes also believed that even paying an overheated price would be cheaper than renting.

The report also uncovered that more than half of the buyers surveyed negotiated the price before undertaking due diligence. This can be a big risk for first homebuyers, given they have very little experience in understanding the ins and outs of due diligence. First homebuyers are also unaware of additional clauses they could negotiate in their favour, rather than the seller’s favour.

They might know the basics like the building and pest inspection but be unaware of what else they should be investigating prior to buying.

If you are looking to purchase a property without adequate due diligence, it could end up being your costliest mistake ever.

We have observed that the number of days a property is on the market is declining, and so is the property discounting by sellers. These are all signs that prices will continue to creep upwards.

You need to be prepared to act quickly but not naively. Research the market thoroughly and seriously consider enlisting the professional services of a property buying team – including a buyers’ agent, solicitor and mortgage broker.

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