Who do you listen to when it comes to entering the property market?
It seems like a pretty simple question, but it’s really not. It’s estimated that buying a home is the third most stressful event most people live through, right after death of a loved one and losing your job. Given that home ownership is seen as the Australian dream, shouldn’t it be a wonderful and uplifting process? Home buyers never stand in front of the “sold” sign with a frown on their face, do they?
There’s so much that goes into buying a home, and most buyers will find themselves pulled in different directions several times during the home-buying process. It’s often difficult for the uninitiated buyer to distinguish between truth and marketing in the property game, and it’s also challenging to determine the motivations of the people you deal with.
For example, it’s not uncommon in the property industry to have “property seminars” which will often promise riches through property. That’s all well and good, as many people really do create substantial wealth through property. However, much of the time these seminars are just funnels designed to get people to buy stock from a particular developer, set up under the guise of giving your average buyer “free property advice”. Once most buyers have this lightbulb moment, they often become more distrustful and retreat into themselves, relying on their own sense of intuition for guidance rather than seeking outside help from others. These seminars will often use classic sales techniques to create a sense of urgency, like tell you someone else is interested in the property, that it’s about to go under contract, or that the property is a once-off, never to be seen again.
When you’re speaking with one of these marketers for property developers, the property is held up as the solution to every single one of your problems. Even the ones you didn’t know you have.
On the other end of the spectrum, you have many a journalist who take great delight in forecasting the end of civilisation as we know it, starting with the property market. Unfortunately, it’s all too easy to write these kind of articles and for them to get noticed because:
- Writing about economic doom, especially when it relates directly to the asset you’re about to buy is scary. Part of the human condition is the unfortunate tendency to focus on scary things.
- These journalists are never held accountable when their apocalyptic predictions fail to eventuate. Bad news sells, and sometimes journalists are just in the business of selling bad news.
Many buyers will also at some point inevitably learn to distrust real estate agents and their motivations, and while this statement sounds like agent bashing, the truth is that eventually buyers learn that the agents job is to get as much money from them as possible. Very simply, an agent who doesn’t do this is bad at their job. The agent works for the seller, not the buyer. This isn’t to say that buyers are all burned by the agents who sell properties to them. On the contrary, I’ve known many home buyers who end up selling the same property with the agent they bought it from, with the rationale of “well, we know they got every single last dollar out of us. We’re hoping they can do that on our behalf this time”.
When it comes to gratuitous, unfounded and unsolicited advice, parents and friends often take the cake though. Property is one of those topics that seems to create a lot of self-styled “experts” within your friendship group, and the radiant confidence from a self-styled expert provides comfort in what is an inherently unsure time in your life, often irrespective of the actual credentials or knowledge behind this “expertise”. When I hear the phrase “a mate of mine said…”, my eyebrow raises in anticipation of what comes next.
All these factors would be difficult to deal with at the best of times. After all, the majority of us are not raised to be suspicious of everyone we come into contact with, but to make matter worse, all the non-human elements of a property transaction can be stressful too.
For most people, this is the largest financial decision they will ever make. Buyers can stand to lose thousands if they miss settlement, and potentially hundreds of thousands if a fault isn’t picked up on the building and pest report. The human element of home buying doesn’t take into account the tight time frames within which so many steps need to be completed in order to be able to complete settlement. It doesn’t take into account the fact that for the vast majority of people, this is something you’ll only do a few times in your life. You don’t exactly have the time or repetition to get used to it.
If you’ve read this far and you’re thinking that you never want to get into the property game, let me back pedal a bit. Buying a property is extremely rewarding, and there’s a good reason that 65% of Australian’s have done it and countless more are desperate to. The iconic picture in front of the “sold” sign isn’t just for the Instagram likes. The smiles on those faces are genuine.
While buying a property will always initially be more stressful than not buying a property, you can create a smooth property purchase by practising the following:
- Get a loan pre-approval sorted with a mortgage broker before you start looking at properties. There’s no point in wasting time seriously considering properties which are outside your budget, or which you won’t be able to buy for another 6 months or so.
- View the entire thing as a learning experience. Adopt a growth mindset.
- Give yourself time. Don’t tell yourself you need to have settled on a property within a certain timeframe.
- Take everything you hear with a grain of salt. If something sounds too good to be true, it’s probably not true.
- Be prepared to walk away from every property.
- Other people will be putting pressure on you during this process, don’t put extra pressure on yourself.
- Surround yourself with good people you trust.