21 December, 2017 / Category: News
Infolio’s holiday blog by buyers advocate Shane Banfield is a humorous piece which pokes fun at our well-meaning rellies’ real estate advice. Take it all with a (sizable) pinch of salt, and buy property well in 2018!
This summer, stay safe. And no, I’m not talking about the usual Aussie summer dangers like peeling sunburn, sharks in Port Phillip Bay or prawns that have been sitting in 32 degree heat on the Christmas buffet table. More sinister than never-ending boxes of chocolates and cheese boards is the well-meaning, good-natured advice we inevitably receive from our family and friends.
Before you start chuckling, please know that this is a very serious subject – particularly if you’re planning to announce that you intend to buy or sell a home in the New Year. Our families only want to protect us – and as such they’ll always err on the side of caution. Uncle Joe might say, “Can you really afford it?”, while Cousin Beryl darkly mutters “Is now really the right time to be buying property?” Listening to their well-meaning but unhelpful opinions about property these holidays could cost you tens of thousands of dollars. Their advice could coerce you into purchasing badly, or not purchasing a property at all. By heeding uninformed opinion, buyers can easily slip down the property ladder after all the hard work of saving for a deposit.
We’ve all had those moments where our festive exuberance takes over and we blurt out “Yeah, we’re thinking of buying a property next year.” Like it or not, opinions on the Australian property market are like a creepy Uncle or eccentric Aunt … everyone has at least one or two. Before long they’ll be peppering with opinions including the perennial favourite “Don’t buy now, hold off, the real estate market is about to crash!”
You may also fall victim to general property advice from someone who’s bought and sold a few homes over the years. In their own words, they’ll have done pretty well out of it – before going on to opine on where and what to buy. The reality is, they could have easily spun a giant wheel and made money on the Melbourne property market in the past few years. My personal favourite uninvited real estate advice came from Mum when I let her know I was buying an Art Deco flat in St Kilda. “How much?!” she shrieked. “You can buy a farm AND the cattle for that price!”
Melbournians we love talking about property – it’s right up there with footy, food and the weather. It’s important to have those conversations – we should talk about property as it’s prudent to au fait with the machinations of the market, even if only for lively dinner table banter. Just remember to take any advice you receive over the turkey or pudding with a pinch of seasoning.
This holiday warning is not exclusive to friends and family, however. The real estate industry is big business, and there’s lots of fake property new out there and bad advice. Beware in particular of buyer apps or computer generated property reports offering “high confidence” price estimates. Accurate or otherwise (and they rarely are) these gimmicky tools are designed to capture your data. I’m sure one day with the advance of technology, artificial intelligence and machine learning these apps will take bizarre human behaviour and emotion more accurately into account – but for now such online real estate are simply worthless. Worse still, I consider them dangerous.
Accurately determining the price of a property is paramount to a successful real estate transaction, whether you’re buying or selling.
The moral of this Chrismas story is that the real estate industry makes it easy for us to transact property. We can buy and sell, sell and buy, and potentially make big money from property. But it also places us at risk of making big mistakes. Did you know that less than 5% of all property transactions are fully maximised (aka buying the right property for the right price)? This means that 95% of all real estate decisions could have been made differently. They could have been been maximised. Would you roll the dice on buying or selling a home knowing those odds?
Most people understand the basics of real estate – they just need the right advice and guidance to make sure every property purchase is a winner. This year, we recommend adding “I will not accept property advice from friends family, the media and random people at dinner parties” to your list of New Year’s resolutions!