Tips for uptight buyers
VICTORIAN homebuyers are the nation’s most stressed out, according to new research.
Facing rising prices and an increasing number of homes sold though auction, more Victorian homebuyers report feeling emotionally overwhelmed by the homebuying process .
The Westpac Home Ownership Report also found two-thirds of Victorian homebuyers did not know the difference between a fixed and variable-rate home loan, worse than the other states, and were the least likely to understand equity and how to use it.
Despite their concerns, an estimated 1.3 million Australians intended to buy or build a home next year, the report found.
Westpac head of home ownership Nathan McMullen said many homebuyers had not conducted comprehensive research and remained unclear about a number of aspects of the home buying process.
That lack of understanding or preparation compounded the stresses on buyers as sellers headed to auction in record numbers this year.
And the heat of competition at auctions was leading to more buyers feeling overwhelmed, Mr McMullen said.
“We’ve seen a relative increase in properties being sold by auction in Victoria relative to other states,” Mr McMullen said.
“The increasing trend in auctions adds to the stress.”
McMullen said Victorians also had to dig deeper into their pockets, with higher stamp duty bills and less generous government grants.
Ray White, Brunswick, auctioneer Jamil Allouche said low confidence could be one of the most significant inhibitors for people when purchasing property .
“Many people I speak with are often overwhelmed with the home buying process, and it’s often around not knowing what price they should be paying for a property,” Mr Allouche said.
“The advice I give to them is to ensure they do their homework and have a professional on side, whether it’s an agent or their local banks, and to go to as many open homes has they can.”
The Westpac report found more than four in five buyers believed getting the right advice and guidance was critical.
However a third said they didn’t know where to start.
Mr Allouche said buyers’ advocates were an option, but real estate agents could also help with the process.
“We’ve helped clients where we’ve gone and bid for them, or where we’ve gone and bought a property for them, with a nomination clause,” he said.
Mr Allouche said it took about three months to get a full picture of a local market.
But the only tools a buyer needed were are a notebook and pen.
“Go out and buy a book and for each address they go and see, write the address, how many bedrooms, how big the block was, what the price guide was and what it sold for,” Mr Allouche suggested.
“It allows them to create that data on their own that gives them an idea of which agents underquote and where they should put their energies.”
Mr McMullen said buyers could never have too much information to help them.
“Speaking with a home finance manager is a good first step to assist with assessing the costs of buying a home and what you may be able to afford,” he said.
“This can help you set out a realistic budget to save for the deposit and start planning for home loan repayments.”
Mr McMullen said buyers needed to consider the cost to buy, what size deposit was needed and whether they could afford the cost of repayments.