By Nicola McDougall, Editor, The Female Investor
Leading national property analytics and negotiations company, Hello Haus, have identified the top five reasons finance-approved buyers aren’t purchasing the property they want more quickly.
Scott Aggett, chief negotiator at Hello Haus, said their analysis showed pre-approved buyers are being paralysed into inaction, but there are ways to overcome the jitters.
“Buyers are getting their finance pre-approval, but difficulties afterwards with locating and negotiating on a property are causing them to take considerably longer than they should to contract,” he said.
“When they do purchase, most will have substantially compromised on what they set out to buy in the first place.
“We’ve also found that 45 percent of buyers who do purchase express buyer’s remorse over their acquisition, while most on average take around seven months to purchase after gaining approval.”
Mr Aggett said this showed buyers are simply not preparing properly for purchasing.
“They’re being reactive, not proactive. They are responding to decisions in the throes of a property search or negotiation. That’s when stress levels are at their peak,” he said.
“Education should be tackled while finance pre-approval is under way which is well before they start the house hunt.”
“Most buyers put a focus on getting finance ready and what the statistics suggest is there is no emphasis on getting themselves what we call, ‘buyer ready’.”
Mr Aggett identified five reasons why buyers are taking so long to transact as well as strategies for overcoming them.
- Can’t find the ideal home
Mr Aggett said buyers must be more honest about their property criteria before they start the house hunt.
“Our research shows that buyers will, on average, view over 300 properties both online and in person before they act. That tells me they aren’t filtering their shortlists down nearly enough to avoid buyer fatigue.
“People don’t focus enough on their ‘must haves’ and ‘nice to haves’ when starting the search. You should build a shopping list of criteria and be really honest about it. You can then confidently rule out many listings.
“Also, it’s crucial to make sure the home you want exists. That is, it’s in the right location and within your available budget. If not, then something must change, but make that change early in the process.”
- Constantly missing out
“There’s nothing quite like the exhaustion of constantly failing to secure a home time and again. Our research showed that, on average, these buyers miss the first five properties they make an offer on, so many simply overpay and compromise to stop the fight.
“There are four things that buyers must recognise.
“Firstly, there’s the value of a speedy decision. Inexperienced buyers often don’t move fast enough, so they get outmanoeuvred by their competition.
“Secondly, they don’t ask enough of the right questions. As a result, they then make very conditional offers or push for a contract that won’t suit the seller’s timeframe.
“Three, they don’t understand all the steps in the buying process well before the negotiation gets under way. As a result, they rush or miss steps in the due diligence period and second guess each decision as they lack confidence to take the necessary action.
“Finally, buyers don’t understand market dynamics. They need to seek real-time market values and real-time levels of demand in their markets.”
- Feeling stressed and overwhelmed
“DIY property buying seems exciting at first, but the mechanics of the process can soon wear you down.
“There are all sorts of pressures to deal with, particularly when looking for a home.
“Stress often comes from agents underquoting or game-playing during the marketing campaign. This is amplified when buyers don’t have rapport with a local agent network.
“The best cure is seeking expert assistance. Outsourcing to an unemotional professional is the ultimate salve for stress and anxiety.”
- Out negotiated by agents
“Negotiation is a skill learned through repetition. As such, most buyers are already at a disadvantage because they’re up against selling agents who are negotiation professionals.
“Most buyers will only purchase three or four times in their lives, so they just don’t gain the experience necessary to excel at negotiation.
“In the end many even overpay for their purchase. Our research showed around 45 per cent of purchasers have buyer’s remorse.
“The best remedy is to outsource your negotiations to an experienced, unemotional third party.”
- Too much compromise
Many buyers panic when they can’t find their perfect property and begin compromising on their wish list, Mr Aggett said.
“But then those compromises go too far and burn out prospective purchasers who feel they are simply giving up too much of what they want to try and secure a home.
“Worse still are those who spend more than they intended on a home that’s less than ideal.
“Again, having that detailed check-list from the very beginning is essential. Be prepared before you start so you’re not caught out during the buying process.”
