The gap between what they sell and what they buy shrinks in a buyers market. This is a good thing!
The opportunity you have been waiting for!
First mistake – waiting to see what’s going to happen in the market instead of grabbing the opportunity. They’ll wait until prices rise again before they do anything, which means the window has closed.
Lower Transaction Cost!
Second mistake – fixating on the sale price of their own home. Instead, focus on the big picture – the total transaction cost of the sell/buy/move.
2. First Property buyers
First Property buyers can really take advantage of falling prices and less competition from investors in a buyers market.
Shiny & New
First mistake buying brand new. The RISK – you pay too much, lose money, builder might go broke. Existing property with potential to add value will serve you better in the long run.
Bank of Mum & Dad
Second mistake – getting advice from your parents. Well meaning parents like to be the font of all knowledge for their kids but often they are not that experienced themselves. Also, they often help their kids pay too much. Be very aware of the limitations of relying on your parents for advice.
3. Property owners with no investment properties
If you bought a property more than 10 years ago, you could be sitting on a good chunk of equity. Depending on your income and other liabilities, you might be able to access this to buy an investment property to help you build your wealth and establish long term financial freedom. luck happens when opportunity meets preparation.
First mistake – not even looking for opportunities in a buyers market.
Second mistake – thinking the risk is in the borrowing and not the asset. Not all investment properties are good investments. . People often borrow a small amount of money and buy a low quality asset instead of focusing on doing their numbers around a low risk asset, which might require them to borrow more money.
Good advice is valuable!
Third mistake – getting advice from the wrong people. Friends and family are not great sources of advice. Usually, there are 5 advisers needed to fully understand your options – but only one can advise you on the actual property. the real estate agent, of course. The other advisers you’ll need are: Accountant – Mortgage Broker – Financial Planner – Lawyer.
4. Cashed Up Buyers
Individuals that are cashed up are buyers who have sold and haven’t yet bought! So, what are you waiting for? This type of buyer has a lot of power in a buyers market, however, you only get one shot at buying the right property. Make sure you choose a high performer, in the right location at the RIGHT price!
Chady Melhem | Property Consultant
Call me for any advice you may need!