According to Doron Peleg, co-founder of BuyersBuyers, a booming market is often the time when buyers make the most devastating blunders, and real estate buyers need to be careful.
“When prices rise rapidly, as we’ve seen in 2021, there can be a fear of missing out, leading homebuyers and investors to take shortcuts in their due diligence,” Mr. Peleg.
In a recent study, over a third, or 35 percent, of buyers expressed Fear of Missing Out (FOMO) as a motivation to buy a home.
Due to the pressure to buy on top of the rising costs of real estate, Mr Peleg said buyers were subject to erroneous decisions and oversight.
“The media have reported in recent weeks that buyers have missed out on their dream home due to errors and mistakes on settlement documents, but this is only the tip of the iceberg when it comes to possibility of due diligence failures, ”he said. added.
The massive growth in the real estate market is an opportunity of a lifetime that most buyers don’t want to miss.
For the third quarter alone, data from the Australian Bureau of Statistics (ABS) shows house prices in Australian capital cities rose 21.7% in the year ending September.
Taking a closer look at specific locations, Pete Wargent, co-founder of BuyersBuyers, said Hobart was the top performing market in the September quarter, with a sharp rise in prices of 8.2%. Despite this, many major city markets have also made significant strides.
“There were big gains for Sydney at 6.2%, Brisbane at 6.1%, Canberra at 6.1% and Adelaide at 5.9%,” Wargent said.
These are numbers that can fuel feelings of being left behind.
“When we see quarterly gains of this magnitude, buyers tend to freak out about securing inventory faster, to avoid missing out on immediate gains,” Mr. Wargent said. “The average house price increased $ 42,000 in the September quarter alone, to reach $ 863,700.”
While this caveat is not meant to discourage buyers from missing out on opportunities in the real estate market, Mr Peleg advised buyers to practice what can help them avoid the FOMO trap – due diligence. .
He reminded buyers to follow a systematic due diligence approach that includes hiring an experienced mortgage broker, an attorney to assist with the transfer of ownership, and a building and pest investigation to ensure they are ensure the house is free from structural or repair problems.
Mr. Peleg also noted that Housing market activity is expected to remain high through Christmas, with a high number of listings and buyers keen to make a purchase before borders reopen and hundreds of thousands of visa holders become eligible to enter in Australia.
And with that, he reiterated a little reminder for buyers: “We only warn that buying a property is often the biggest financial decision Australians have ever made. Don’t make critical mistakes in the rush to buy something quickly.
Property refers to a tangible or intangible item over which an individual or business has legal rights or ownership, such as houses, cars, stocks, or bond certificates.
Real estate is a type of real estate that refers to any land and its permanent improvement or accompanying structures, whether natural or man-made.