As it has become clear the property market momentum reported in December has held into the new year, the head of a real estate association has warned home buyers and investors against letting the tide of activity pressure them into a property purchase prematurely.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos explained that rushing into such a big decision, even during a hot selling season, is a “critical mistake to avoid”.
“Nationally our members are seeing higher inspection numbers, a heightened number of bidders and offers, tighter days on the market and stronger prices this January than ever before," she said.
“Purchasing in a hot market requires fast decision-making but it should never lead to irrational decision-making or tardy due diligence."
According to Bakos, the country’s “busier than usual” January buying conditions have seen the number of buyer enquiries rise from where they’ve sat in previous years – and by a significant margin at that; however, the catch is the “desperate behaviours” some buyers are exhibiting, as the pent up demand that accumulated over the past year threatens to burst.
Without acting with patience and prudence, Bakos foresees a higher likelihood buyers will regret their purchases or end up overpaying.
“Buying safely is paramount and if the situation doesn’t allow, we firmly believe that a buyer is better off letting an opportunity go than risking a rushed purchase if the proper due diligence can’t be done in time," she said.
“If buyers let FOMO (Fear Of Missing Out) bite too hard and buy irrationally, not only could they be paying too much for a property, but they could be buying the wrong property.
“With a rushed purchase, it’s easy to miss a red flag that could lead to losing a deposit or dire financial costs later down the track.”
Bakos listed zoning issues, restrictive covenants, electrical and plumbing problems, troublesome neighbours, expensive special levies and obscure titles as the common red flags more likely to be overlooked in a hot, fast-paced market.
“There are also those buyers who are determined to buy a property that’s low in demand. Their strategy is to avoid competitive situations fearing that competitive conditions spell over-payment but tread carefully as this philosophy can end up costing a lot more than overpaying,” she finished.
