Buying your first home? - Less emotion means better value

Whether you intend to live in it or live off it, acquiring your first property can be a daunting task but it is possible to learn before you buy whether you're paying a sensible price.

Much of that information is best collected by inspecting a property in person and online.

The rest is available through professionals whose job involves monitoring the property market.

One of the first things to do is concentrate your efforts on two or three suburbs, says Aussie Home Loans managing director John Symond, otherwise you'll be hard pressed to educate yourself sufficiently to recognise good value when you see it.

"Stick to the area you would like to live in and see as many houses as you can," Symond advises owner-occupiers.

This will help you understand how far your money will go. But the advice can also apply to investors.

"People tend to understand their backyard," Symond says.

"The further away from your knowledge of the area, the more you don't know the most appealing part of a suburb."

Symond urges people to attend auctions so they understand not only the process but the mood of the market. His own view is that prices are comparatively weak.

"We're at the soft end of the cycle. We don't know whether property values will soften and by how much, so you can't afford to make a mistake today."

He encourages buyers to talk with local real-estate agents to learn things such as where the closest amenities are or which side of a highway is preferred - and why.

"It might well be that you didn't realise the east side of the railway is better than the west side and they'll explain why."

Symond suggests speaking with valuers, even though your lender will order a valuation regardless.

This is a good way of learning about the historic values of an area and which parts of a suburb are considered most desirable.

This needn't mean paying for a full valuation, he says. Instead buyers can ask their lender for a list of valuers and offer a couple of hundred dollars for a "preliminary opinion" on a property.

"Arm yourself with as much information as you can get," Symond says.

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Less emotion, better value - Property - Money - Business - Home - smh.com.au

 

I dunno, those tips are probably good if you are buying an investment property.

But if you are buying a home to live in wouldn't emotional aspects be an important consideration? Shouldn't your first priority be how much you personally like the place, and how much you personally want to live there, and what value you personally would put on that? Not what other people or RPData think it is worth.

Sure no one wants to get ripped off, and a lot of personal wealth is locked up in peoples PPOR's so it is important to manage this wealth, but just from a philisophical point of view I think being so business-like in buying a home to live in is a bit silly.

 

You are probably correct there but we should try to be as little attached to the property as possible.

I remember when we bought our first home we had a building inspection report done and they found various little things wrong with the place and gave me an estimated repair cost figure (around $5K).

I presented the report to the REA demanding a drop in our contract price. (This was during our cooling off period).
The Vendor initially said no but as we were walking away they came to the party...

Cheers

 

I would say it's near on impossible NOT to have an emotional attachment when buying your own home- after all, it's more than just an investment or place to live. It's your castle, haven; call it what you will- for most home buyers emotion is well and truly present. And that's perfectly fine. We're homo sapiens after all

What you DON'T want to do, however, is to allow that clouded emotion to sway your decision-making to such a degree that you become "blinded" to any faults, engage in self-justification behaviour, remain uninformed or under-researched on the area/location/position/property type and end up paying more than you needed to, or your budget allowed for.

Like Bill, being in a strong enough position to walk away (or indeed have other properties in contention) can be enormously helpful, but at the end of the day it's usually one property that buyers fall in love with and just have to have!! Those of us on here who've been around for a while know there's always another property around the corner but try telling that to anxious home buyers who've found the ideal home and are in a state of panic about securing it before it "gets away". Emotion comes into play: emotion that's often fuelled by the agent and serves to create that sense of urgency upon the luckless home buyers.