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Emotional pitfalls of buying and selling property

11:00 AEST Fri Nov 12 2010
Emotional side of buying and selling property
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By Hannah Nicholas,
MSN NZ Money writer

Homes are bought and sold every day and for many it's a very stressful event. Whether you're the buyer or the seller, when it comes to making property decisions it's best to put your emotions aside.

Buying property
Buying a house is an emotional experience but before you sign on the dotted line it's important to make sure you are buying the property for all the right reasons. Sure you have to love it but you need to make sure you get the best deal and home for you.

Here are the most common emotional pitfalls when it comes to buying property.

1. Getting too attached to a property
Remember it's easy to be persuaded by real estate agents and marketing techniques such as stylish makeovers and trick photography. If you have the chance, go home and think about the property and whether it does in fact tick all your boxes (including price-range, preferred location, right number of bedrooms, bathrooms etc). Things might look different given time.

2. Overlooking building reports, LIMs etc
The property you go for has to appeal to you but don't ever make the mistake of purchasing a property without doing your homework even if it is love at first sight. This includes getting building reports, land information memorandums (LIM) to discover if any issues such as storm water or sewage drains or plans and zonings affect the address, check any relevant council files and be sure to check out the neighbourhood (including your neighbours and nearby facilities).

Don't take anything for granted, request pest and building reports, strata inspections, ask questions and do your research otherwise it's all too late after you move in.

3. Paying over market value
You know your limit and borrowing capacity and no matter how much you love a property, it's not a good idea to go over your budget or to pay over the market value. Sometimes you have to know when to step away. Another property, the right one for you (and your budget) will come around.

Selling property
Just as buying property is wrought with emotional issues the same feelings can overtake when it comes to selling your home. Here are the most common emotional pitfalls when it comes to selling property.

1. Being desperate to sell
There's nothing worse than a buyer who is desperate to sell as mistakes are bound to be made. Even if you are in need of an urgent sale, never give off this impression as real estate agents may well pass this onto buyers and given your circumstances they may talk you into taking an offer that's not right for you.

If you are desperate for a sale, the best thing you can do is do your research before putting the property onto the market. That is:

  • choose the right agent for you;
  • know what your home is worth; and
  • have your home looking its best.

2. Setting an unrealistic selling price
Many sellers are so personally attached to their homes that they set unrealistic expectations when it comes to the selling price. While you might think your home's the best on the block, it just might not be. Those buyers who face facts and set a realistic asking price often sell their homes much quicker and with relative ease.

3. Going with the wrong agent
Going with the agent that offers you the highest valuation on your home is not necessarily the best option. Price is important but in order to get you the best deal, the agent has to see your home's advantage points and know the area well. If they are enthusiastic about the property (rather than just getting a listing), this will reflect in their dealings with potential buyers.

When it comes to choosing an agent it's best to:

  • find someone you can work with and who communicates to your satisfaction;
  • choose an agent who has sold similar properties;
  • find someone who's enthusiastic about the property and has potential buyers on their books; and
  • ask for references.

At the end of the day, the right agent should have good knowledge of all recent sales in your area and be able to accurately predict what your home will sell for.