Don’t deck the halls too soon, REBAA warns
Christmas can feel like the ultimate property deadline, but the time pressure could lead to hasty settlement decisions.
The weather is getting warmer, jacarandas are in bloom, and mince pies are starting to sneak their ways onto supermarket shelves – all reminders that it won’t be long until Christmas is upon us.
But for many home buyers and investors, Christmas is about more than just Santa Claus and Mariah Carey; it’s also the deadline that many buyers set for the completion of settlement.
The Real Estate Buyers Agents Association of Australia (REBAA) warned that “with less than two months left until Christmas, some home buyers are making hasty property buying decisions that could negatively linger financially for years to come”.
The association recognised that while the desire to purchase and settle in time for Christmas is common amongst buyers, “that is not the best mindset for long-term property ownership or investment”.
“It makes sense that people want to be settled into a new home in time for Christmas – or even have a property settled at the same time for investors – but the looming holidays should not be the defining reason to purchase a particular property,” emphasised REBAA president Melinda Jennison.
She warned that buyers who purchase a dud or a property that is not fit for purpose risk “serious financial ramifications for many Christmases to come”.
One of the most common mistakes that Ms Jennison has encountered with time-pressed buyers is overcapitalisation. “Overpaying for a property can result in underwhelming capital growth that can have consequences for your future financial position as well as your ability to upgrade to a new home,” she underscored.
Another common error at this time of year is failing to perform due diligence on a property. Keen buyers might not obtain a building or pest report, or skim over contract conditions, leaving them with a property riddled with expensive problems and no means to get compensation.
Ms Jennison even reported buyers who purchase before viewing a property, or rely on family and friends to inspect the site on their behalf. She warned that this can be a financially risky strategy, as “their emotional connection and relationship with the buyer can influence their recommendations”.
Ultimately, the REBAA president reminded buyers that it is crucial to take plenty of time to ensure that they choose a property that is appropriate for their present and future needs.
“While it would be lovely to be settled in your new home for Christmas, what is ultimately more desirable and strategic is purchasing a property that suits your lifestyle now and well into the future,” Ms Jennison concluded.
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