Login
iscover
It’s taking “considerably longer” for finance-approved buyers to take the plunge on a property — with the average time taken to transact now approximately seven months to purchase, according to a property analytics and negotiations company.
Hello Haus has revealed a number of reasons pre-approved buyers are taking longer — and some of it is coming down to preparation.
The group’s chief negotiator Scott Aggett said there are plenty of buyers out there who simply are not properly prepared to make a purchase.
While noting that would-be buyers are having difficulties with locating and negotiating properties, many are also stumbling on the eventual purchase too.
“When they do purchase, most will have substantially compromised on what they set out to buy in the first place,” Mr Aggett said.
The chief negotiator revealed that the group has found “that 45 per cent of buyers who do purchase express buyer’s remorse over their acquisition, while most on average take around seven months to purchase after gaining approval”.
He said issues arise due to these individuals being reactive, not proactive: “They are responding to decisions in the throes of a property search or negotiation. That’s when stress levels are at their peak.
“Most buyers put a focus on getting finance ready and what the statistics suggest is there is no emphasis on getting themselves what we call, ‘buyer ready’.”
It appears there’s an opportunity for agents to get on the front foot when it comes to enticing buyers, with Mr Aggett suggesting that “education should be tackled while finance pre-approval is under way which is well before they start the house hunt”.
So what are some of the most common issues plaguing would-be purchasers in 2022 — and how can agents better prepare them?
- Can’t find the ideal home
According to Mr Aggett, many buyers aren’t honest about their own property search criteria.
“Our research shows that buyers will, on average, view over 300 properties both online and in person before they act. That tells me they aren’t filtering their shortlists down nearly enough to avoid buyer fatigue,” he commented.
From his perspective, “people don’t focus enough on their ‘must haves’ and ‘nice to haves’ when starting the search”.
Advising that buyers should build a shopping list of criteria and be really honest about it, he argued that could help to “confidently rule out many listings”.
“Also, it’s crucial to make sure the home you want exists,” he emphasised.
“That is, it’s in the right location and within your available budget. If not, then something must change, but make that change early in the process.”
- Constantly missing out
“There’s nothing quite like the exhaustion of constantly failing to secure a home time and again,” Mr Aggett conceded.
Pointing to research showing that buyers miss the first five properties that they make an offer on, he shared how “so many simply overpay and compromise to stop the fight”.
According to him, there are four aspects of a transaction that buyers are not often well versed on: “Firstly, there’s the value of a speedy decision. Inexperienced buyers often don’t move fast enough, so they get outmanoeuvred by their competition.”
Secondly, many buyers “don’t ask enough of the right questions” — “they then make very conditional offers or push for a contract that won’t suit the seller’s timeframe”.
Thirdly, Mr Aggett said many don’t understand all the steps in the buying process well before the negotiation gets underway. When this is the case, they will rush or miss steps in the due diligence period and second-guess each decision as they lack confidence to take the necessary action.
And finally, the chief negotiator recognised that buyers don’t understand market dynamics.
“They need to seek real-time market values and real-time levels of demand in their markets,” he advised.
With agents oft armed with this kind of data, this is where they can be stepping in.
- An inability to negotiate
Selling agents are negotiation professionals. They do this day in, day out.
Compare this to a buyer, who may only purchase three or four times in their lives, and according to Mr Aggett, the buyer is “already at a disadvantage”.
It’s this that can be intimidating for a purchaser — and something that agents can be mindful of, especially in this kind of market.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
Newsletter
