Homebuyers, I know you’re scared. You’re scared that the home of your dreams is going to slip through your fingers. You’re scared that the estate agent is trying to rip you off. You’re scared that you’re always going to be living with your folks in a quiet court in Boronia. And being scared makes us all into d*cks. But in the second of Hometruths Melbourne’s Don’t Be a D*ck Guides to Real Estate (read the first instalment here), we highlight ways you’re unconsciously being a tool during your journey for property – and how this toolery is actually preventing you from achieving the holy grail of property ownership.
1. No-one owes you a property, so stop acting as if they do.
Property prices in highly desirable areas with limited property supply – typified by their proximity to the city, to amenities and to employment – are not going to become more affordable. The reality of our economy is that Baby Boomers are moving closer to the city. Baby Boomers are asset rich, thanks to both their time in the market AND the era they were born into. Their good fortune (and decision to invest in property) is broadly a trick of fate, and not a personal insult. As opined on in our Negative Hearing blog, some home buyers foster unrealistic ideas about the economy they exist in, and what they should be able to buy. They refuse to look the difficult reality of our economy squarely in the eye and adjust their expectations.
Australia’s capital cities are quickly mirroring their European counterparts, with the soon-to-be norm being lifelong tenancies rather than home ownership. Melbourne is growing by 1760 people per week, consistently. They’re all competing for a limited amount of affordable property. Interest rates are at all-time lows. Sitting on your hands and waiting for a ‘bubble’ to burst before purchasing is ultimately self-harming, pricing you out of your preferred inner-urban location. Property in the inner-city is expensive. I know it is. It’s galling to see a two-bedroom shitbox in Brunswick go for a cool million. It can make you feel helpless and uncared for by the community in which you live. So mourn it, gnash your teeth and rage to your peers.
And then make sure you get over it and make a decision to do the best with what you have, where you can.
2. Shit properties are the shit.
Just like everyone should have that one shit boyfriend/girlfriend to teach them the value of a quality relationship – everyone should have one shit property in their purchasing history. It builds character. And more importantly, it gives you the opportunity to spend time in the market watching your asset grow.
Are you turning your nose up at old school one bedrooms on the edge of growth suburbs, because they’re too far from your ideal, or because they’re a bit manky? Think carefully – these outer fringe growth corridors are ripe with the relatively-kinda-affordable properties that you need to buy to hop on the asset elevator. If you are on a strapped budget, avoid brand new off-the-plan apartments. They might appear convenient and glossy, but they come at a substantial premium for size and have stamp duty plus a margin built into their prices. Choose the ugly duckling, which will grow in value at a rate you can’t possibly hope to save yourself. If you’re lucky enough to be able to do so, buy an ugly property now, and in a decade you’ll be glad you did – congratulating your former self whilst quaffing single blend coffee in your renovated residence. Or continue dissing properties that don’t have all the bells and whistles while waiting for prices to come down. Whatever.
3. There’s no conspiracy to screw you over.
Estate agents are hard workin’ schmucks in shiny suits with leased European cars. (I say this with love – I’m married to one.) They’re not Bilderberg Group evil geniuses. They’re not making voodoo dolls of potential buyers and working out the most audacious lies to tell them. Bottom line: if you have enough money you’ll buy the property. If you don’t, you won’t. There’s nothing else to the story, not really.
What agents are doing is working very hard to help their vendor come to terms with the reality of the market they’re selling within. This is called conditioning. There’s nothing evil about this either – it’s just a process which helping sellers look more dispassionately at their asset so they can make a decision to sell when an appropriate offer presents itself. It involves the feedback of recent sales results, and comments direct from buyers too. And whilst you bitch to your mates that property sales results are offensively high (‘That guy paid waaaay too much for the property. What a rip off!’), the likelihood is that the vendor probably wanted 10 – 20% more for their property than it eventually transacted for. It’s only through the hard graft of education that the estate agent has eventually brought buyer and vendor together.
Remember that the estate agent works for and is paid by the vendor – not the buyer. This doesn’t mean that agents work against you or are hating on you. More often than not, buyers are working against the agent by not showing their true interest in a property, before becoming angry when it’s sold ‘under their noses’. As if, by showing their interest and enthusiasm for a property, something terrible will happen. If you’re finding your hand staid by agent paranoia or lack of knowledge of the property market and its machinations, I suggest you engage the services of a buyer’s advocate to help you acquire a property. Buyer advocates work for and are paid by their buying clients – and they can be just the ticket to help you get over your toolery in the kindest possible way.
4. Hand over your frickin’ details.
Enough with the playing hard-to-get with phone numbers and email addresses at open for inspections. If you don’t hand over your contact details to the agent or you make a song-and-dance about the process you are a tool. You’re disrespecting the owners of the property AND the property professional standing the open. It’s someone’s home and a space that needs to be secured – it’s not a free-for-all for nosey parkers. And whilst I am all for nosey-parkering, nothing is for free: your details are the passcard to the inspection. If you’re buying or selling property (or even if you’re not – at least, you’re not now) – these details will allow the agent to invite you to similar upcoming opens, and to build a hopefully mutually useful relationship. Sure, their weekly emails are often boring and won’t regularly be tailored to your exact needs. It is what it is. It’s a social contract. Don’t be an open for inspection tool. (And don’t badmouth the property whilst you’re there loudly, either. There’s a special place in hell for those people.)