By Rich Harvey, CEO & Founder, propertybuyer.com.au
There’s a rush of enthusiasm when we decide to start something new, but the glow can soon fade. Think about that now dusty gym membership, or idle bread maker that cost you a fortune during the pandemic.
We see something similar in the world of property, but the flagging gusto that can follow a decision to buy has little to do with laziness. It’s an exhaustion brought on by over-thinking of your real estate options.
This is commonly known as analysis paralysis, and it’s collectively cost buyers more money than any dodgy deal delivered by a spruiker.
But there is a cure. Take this dose of medicine and the rewards can be substantial.
A costly state
As mentioned, analysis paralysis occurs when a property buyer overanalyses their options, and they become mentally unable to proceed. They’ve reached a mindset where it feels like any decision will be wrong, so they make no decisions at all.
Analysis paralysis may sound harmless, but there are real costs resulting from it.
Firstly, there’s the time wasted. All those hours spent researching markets, attending open homes, running numbers and dealing with finance issues. This is time you could have spent relaxing with family, or working in your own speciality field to making money for your household.
Then there’s the mental fatigue. Analysis paralysis will wear you down not just during the property process, but outside of those hours too. You’ll experience lack of sleep and endless to-and-fro discussions with your significant others. There are the ups and downs of joy and depression. All of these take a toll on your relationships, and your normal productivity.
Finally, inaction costs money due to lost time in the market. Ask any property buyer their biggest regrets – the first will be that they didn’t buy early enough, and the second will be they sold too soon. Why? Because time out of the market results in losing a big chunk of capital growth.
The cure
So how do we avoid analysis paralysis and get on the ladder? Here’s the four-step process I suggest buyers follow.
1. Set solid goals
I know this seems obvious, but you’d be surprised at the number of potential buyers who fail to take this important first step.
By setting goals I don’t mean having some vague discussion with a mate about what you think you want in a property. I mean writing down a solid, unshakeable statement of intention that you can direct yourself toward. Is it an investment that needs to generate a certain level of rental income? Is it a first home that you will want to move out of in a few years and retain as the start of a property portfolio? Is it a renovation project, where you
want to add capital value and rental return? Is it an upgrade strategy- moving to nice suburbs, getting a larger home office and backyard pool? Or perhaps a down-sizer strategy now the kids have left home? Perhaps you want to secure your first commercial property?
With a goal now set, it’s time to compile a list of ‘must haves’ and ‘like to haves’.
Your ‘must haves’ should be unwavering, i.e. “It must have four bedrooms, two bathrooms, a home office and an outdoor entertainment space.”
Then your ‘like to haves’ could be a pool, large lawn space and media room.
Locking in your goals and requirements like this will save you a lot of time.
2. Determine a strategy
Set out the path to achieving your goal. Can you break it down into incremental steps?
The path will probably include approaching a mortgage broker to get your pre-approved finance in order. You might also need to speak to an accountant about your tax position.
It should also entail tweaking your home budget to manage repayments, rates, maintenance and all other additional costs of becoming a property owner.
You also need to think about how you’d like to buy. You can DIY the process, but it will involve a lot of time and effort. There’s market research such as studying recent sales and analysing relevant statistics. You will need to troll through the pages of listing portals while also attending open homes and auctions.
The alternative is to outsource this hard work. A buyers’ advocate can take on the heavy lifting for you. They can deliver measured, unemotional analysis on the plausibility of what you want to achieve too.
3. Choose a location
Now that you know what you want from a property, how much you can spend and the way in which you’ll acquire it, it’s time to choose a suburb (or suburbs).
By the way, many people who hit analysis paralysis skip steps one and two, and head straight to location. By doing so, they don’t consider the range of suburban possibilities that will meet their needs, and then reduce those options based on the earlier steps.
So, its time to ask – what do you want from the location you choose? Is great schooling within an easy walk a ‘must have’? Will a nearby café hub be required? Are parklands for long walks with your pup desirable?
Knowing your locational details means you can look at all the suburb options and define a range of addresses that will meet your needs.
This process will even reveal a few options you hadn’t previously considered.
4. Select best property type for area
Now you know what you want and where you want to be, it’s time to begin looking at property options. What sort of property in this suburb will deliver on your goals?
Will it be a large but modest bungalow that needs cosmetic renovation? Perhaps it’s an apartment with plenty of space and a balcony all situated just moments from a decent entertainment strip? Could it be a duplex unit offering an affordable way into your most desired suburb?
Knowing the property type you want helps reduce your initial list of preferred listings. All the work to this point then allows you to quickly say ‘yes’ or ‘no’ to those options so you don’t waste time and energy.
Of course, the best approach to breaking the hold of analysis paralysis is via professional assistance. A buyers’ advocate can walk you through the steps and keep you moving toward your goals and advise if your strategy is feasible and realistic. They insulate you from the investigative grind and help maintain your enthusiasm for a winning outcome.
To have one of our friendly Buyers' Advocate's contact you, click here to:
or
call us on 1300 655 615 today.
