Prop­erty buy­ers blow­ing bud­get

Wangaratta Chronicle - North East Regional Extra - - Your Finance | Garden Hints -

A RE­CENT sur­vey by lender ME re­vealed 22 per cent of home buy­ers ex­ceeded their spend­ing limit when they pur­chased their most re­cent prop­erty.

Of those who went over bud­get, 46 per cent ex­ceeded it by $30,000 or more, 30 per cent ex­ceeded their bud­get by $50,000 or more, and 10 per cent ex­ceeded their bud­get by $150,000 or more

The most com­mon rea­sons for ex­ceed­ing their self-im­posed limit were: fall­ing in love with the prop­erty (52 per cent); un­der­es­ti­mat­ing the bud­get re­quired (28 per cent); im­pa­tience (20 per cent); un­derquot­ing by an agent (15 per cent); and get­ting caught up in a bid­ding war (12 per cent).

64 per cent of those who went over their bud­get ad­mit­ted some kind of neg­a­tive con­se­quence as a re­sult.

For in­stance, 28 per cent said their overspending im­pacted other fi­nan­cial goals, 27 per cent said they had to make changes to cur­rent spend­ing, and 24 per cent said they ex­pe­ri­enced emo­tional stress as a con­se­quence.

The sur­vey also showed buy­ers are bas­ing their per­sonal lim­its on a va­ri­ety of fac­tors.

The most com­mon ba­sis for spend­ing lim­its was what peo­ple were com­fort­able spend­ing to avoid too much debt (55 per cent), other fi­nan­cial com­mit­ments (52 per cent), the max­i­mum they could bor­row from their bank (46 per cent), while 45 per cent based their bud­get on what they thought was the mar­ket price.

Some strate­gies that can help you re­main within your prop­erty buy­ing bud­get in­clude:

- Stay pa­tient – there will al­ways be an­other prop­erty. Keep your feel­ing in check and if you can’t, re­move your­self from the sit­u­a­tion by or­gan­is­ing some­one else to do the pur­chas­ing for you, ei­ther a fam­ily mem­ber or friend, or even a pro­fes­sional buyer. Change your buy­ing cri­te­ria in­clud­ing size, lo­ca­tion, or style of prop­erty.

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