- Many prospective buyers fall into traps when buying a house, which can see them paying more in the long run
- Establishing a strategy for choosing the right property is essential in Australia's record-making house price boom
- Australia's leading experts lend their advice to help you avoid these problems and make wise investment decisions
- They advise to never buy without first doing research of the area, and not getting emotionally attached to properties
- Never spend more than you budget, don't buy for the short term, and don't buy at the wrong time
Establishing a strategy and sticking to it is crucial when negotiating the waters of the house market, especially as Australia's record-making house prices are steadily increasing and safe within a property bubble that doesn't look to burst. Daily Mail Australia spoke to the country's leading experts to get the best advice for prospective property buyers, and the ultimate traps to avoid when looking to bid, ahead of a weekend brimming with auctions in the capital cities.
Never buy without doing your research
From checking out the prices of houses in the area, to commissioning inspections of the property, arming yourself with as much information as possible is your best bet to make a sound decision.
Brian Haratsis, Executive Director of MacroPlan advises that scoping out sales in the area is one way to match your expectations to reality.
'Check that sales of houses in the area in which you are interest in purchasing are similar or under what you're willing to pay,' Mr Haratsis said.
'Check the market to match your target. The aspirational purchaser end up paying more than they can afford and expose themselves to greater risk,' he said.
Peter Kelahar, director of PK Property Buyers Agency agrees, noting that buyers can fall into the trap of paying too much for a property if they don't do their research first.
Both experts also advise prospective property buyers to look at the facilities in the local area, and to commission inspections of the property.
'Always get a pest and building inspection to make sure the property is sound,' said Mr Kelahar.
'Next, check out the infrastructure and public transport nearby. For those looking to buy as an investment, don't buy in an area that has a high vancancy or unemployment rate, as there will be no capital growth and you won't be able to rent it,' he said.
Don't get emotionally attached to a property (until you own it)
While it can be easy to fall in love with a beautiful house, never compromise your bidding position by making a property the be all and end all. The advice from both experts is to remember that there will always be another property, and there is no 'ultimate house'.
'Don’t get emotionally involved in a property, and only pay what you think it’s worth,' said Mr Kelahar.
This is especially important to keep in mind when looking to buy at auction, as emotions can get the best of you if you get caught up in the excitement of buying a property then and there.
'Make sure at auction you don’t bid in too large amounts, and when you are bidding, be aware of other people bidding, so you know when to start and when to stop,' he said.
Never go beyond your set budget
By setting a budget, and sticking to it, you will avoid greater risks of debt and ensure that your money goes towards what you intended.
'Have an amount of money which you are prepared to spend, and don’t go over that amount,' said Mr Haratsis.
The same goes for interest rates, and Mr Haratsis advises that prospective buyers should assume that mortgage interest rates will increase over time.
'Assume that the mortgage interest will reach long term average levels and increase,' he said.
'Australia at the moment has very low interest rates, and people often believe these rates will be maintained very long time, but the Australian Reserve Bank has indicated that the rate of growth will increase in 2016.'
Don't buy for the short term
While buying for investment can be a very lucrative option, Mr Kelahar advises that when purchasing for personal use, it's best to look at the long term as buying and reselling can end up costing you more than it's worth.
'When buying property for yourself, look for the actual property that you want to live in long term,' he said.
'It can cost a lot jumping in and out in terms of stamp duty.'
Don't buy at the wrong time
Never buy when prices have increased, despite the temptation to think that the market will only get more expensive if you wait for it to cool off.
'What happens is people see a market 'hot', and think that they better get into the market before the prices get even higher,' said Mr Haratsis.
He advises to make sure you buy at the right time, which may mean waiting until the next set of interest rates are released.
'Prices will then come off or at least moderate. Don't fall into the trap of thinking that you should get in now or you'll lose out forever,' he said.
'There will always be another property out there.'
Read more: http://www.dailymail.co.uk/news/article-2843441/Want-survive-Australia-s-property-boom-reveal-five-things-NOT-buying-property.html#ixzz3PPFgj4Iv Follow the Daily Mail: @MailOnline on Twitter | DailyMail on Facebook