As property markets across the nation continue their downward fall, expert property negotiators Hello Haus has identified the top five reasons finance-approved buyers aren’t purchasing as quickly as before.
In 2022, the company unearthed industry statistics which indicated 45% of property purchasers expressed some form of buyer’s remorse over their acquisition while most are taking about seven months to purchase after gaining finance approval. Meanwhile, many have substantially compromised on what they set out to buy in the first place.
Hello Haus founder and director Scott Aggett (pictured above) said the analysis showed pre-approved buyers were overcome with nerves and were paralysed to act.
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“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,” Aggett said. “Mortgage brokers can help their clients by ensuring they are ‘buyer ready’ whilst awaiting conditional loan approval. There are practical steps brokers can take to assist their clients.”
Aggett said Australian property buyers tended to lack education around the buying process and were unsure of the speed at which they needed to navigate through the find, analyse, negotiate and transact steps when securing a home or investment.
“By starting with a clear plan to see more of the market, this will reduce buyer competition and it’s key to controlling the outcome. Knowing how to determine market value and market demand are fundamental to a buyer’s success,” he said.
“In today’s competitive home buying market, mortgage brokers play a key role in canvassing the whole of the loan market to find the best loan solution at the lowest rates for their client. Speed wins in the property game, so brokers need to go beyond just getting their clients’ finance ready and get them buyer ready so they can act fast to reduce their days on market and outperform their buying competition.”
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Here are Aggett’s five reasons why buyers are taking longer to transact on a new home:
Can’t find the ideal home
“Buyers must be more honest about their property criteria before they start the house hunt. Our research shows that buyers will view over 300 properties on average both online and in person before they act, which tells me they aren’t filtering their shortlists down nearly enough to avoid buyer fatigue,” Aggett said.
“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.”
Constantly missing out
“There is nothing quite like the exhaustion of constantly failing to secure a home time and again. We found that these buyers on average miss the first five properties they make an offer on, so many simply overpay and compromise to stop the fight,” he said.
“Buyers must recognise there’s the value of a speedy decision; they don’t ask enough of the right questions, resulting in making very conditional offers or pushing for a contract that won’t suit the seller’s timeframe. You need to understand all the steps in the buying process before the negotiation gets under way.”
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,” Aggett said. “Stress often comes from agents underquoting or game-playing during the marketing campaign, which is amplified when buyers don’t have rapport with a local agent network.”
Out-negotiated by agents
“Negotiation is a skill learned through repetition, where most buyers were already at a disadvantage because they were up against selling agents who were negotiation professionals,” Aggett said. “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.”
Too much compromise
“Many buyers panic when they cannot find their perfect property and begin compromising on their wish list. 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,” Aggett said.
“Having that detailed checklist from the very beginning is essential. Be prepared before you start so you’re not caught out during the buying process.”