As a buyer in the current market, FOMO (fear of missing out) can be your biggest enemy. It can lead to many years of regret from the moment you unpack in the wrong property, thinking, “What have I done?”
As a buyer’s agent, I have never been busier. The Sydney property market is running boiling hot. An astounding number of people are inspecting properties, and I’m hearing some crazy sales results. At a recent auction, for example, the property initially had a guide of $3.8 million, which was quickly revised to $4 million and subsequently $4.2 million due to the level of interest. With 10 registered bidders, the selling price was just short of $5 million.
I’m sorry if that sounds scary, but that might be what you’re up against, as scarcity drives prices up and can feed the frenzy.
Here’s my advice – don’t panic.
Easier said than done, right? However, I’m going to share with you a few implications of getting caught up in the FOMO trap and what you can do to avoid it.
Focus on quality
People are so desperate to get into a property that they are ignoring all of their ‘must haves’ and bidding on properties that they would ordinarily dismiss. I am talking about those properties on main traffic arteries, such as Sydney’s Parramatta Road, for example. Here’s a mantra I’d like you to repeat after me: “Don’t eat yellow snow, don’t buy on yellow roads.” I know it’s a bit cheeky but I hope you’ll now never forget it.
I heard of a friend of a friend who was about to put in an offer on a house that her husband hadn’t even seen. Luckily, he did see it, and lo and behold they decided the bedrooms were just too poky, and they didn’t proceed with the offer.
Don’t lose sight of what matters to you in a home. Make sure you take a breath and visit the property at least twice before making a decision. Usually, on the second inspection, the rose-coloured glasses come off and you can view the property more objectively.
Hot markets don’t last forever
When you’re in the thick of things, it may seem that prices will only ever go up, and stock will keep shrinking. In reality, when looking at previous hot market history, we see that potential vendors are encouraged by crazy sales results and decide to sell because they believe they’re going to make a killing.
This means that more properties are likely to come onto the market, buyers will have more choice, and are likely to steer clear of those properties in that wrong location, with that inflated price tag. Clearance rates drop, the market goes from hot to warm, and buyers have more choice and less reason to panic buy.
It’s better to wait than overcommit or make a bad decision. Keep your head.
Don’t believe the hype
I mentioned above that the property market normally goes through a period of readjustment, but these are not normal times, given we are still living in the midst of a pandemic. So, whilst there are likely to be changes to the housing market because of an increase in vendors’ willingness to list, we are also coming to the end of mortgage freezes, JobKeeper and some first home buyer incentives. How these changes will affect the market exactly, no one can know for sure. I do know, however, that the daily news reports are feeding the FOMO frenzy and therefore are not particularly helpful.
It may be difficult, but it may be best to remove the state of the market from your thinking altogether. Try not to buy into what the latest news reports are spouting and focus on doing your own research instead. Talk to agents about recent sales results or look at the sold section on Domain or Realestate.com.au so you are across current values. You should approach hot, warm or cool markets in precisely the same way – only purchase a quality property that ticks your boxes at a price you can afford.
Buy within your means. It’s never been more important to get your finances and due diligence ticked off before committing.
Cover image source: Soifer/Shutterstock.com
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