BUYING OUT OF AREA? SOME MISCONCEPTIONS

Getting alignment on your financial capability, expectations and the reality of the market is crucial. If you are not aligned, then you are committing a fundamental sin against yourself and wasting a lot of time and effort. The market won’t mold to your expectations. It is a moving and changing proposition.

The expectation gap – Often interstate buyers or out of area buyers look to a new destination they wish to live in and directly compare it to where they are now – human nature right. This is a flawed assumption. For example, a person living on a 400m2 block with a brand-new home in Scofield’s cannot expect a similar contemporary match in a beachside suburb for similar money. There is a disparity. A massive one. The areas are drastically different. The expectation gap from purchasers however remains. Thinking must be readjusted and aligned to the market. In this case, selling a new home plus adding substantial funds will only acquire the older property with major renovation requirements several streets away from the beach….and no contemporary feel.

Another case – a professional couple from a good suburb in Melbourne own a home there, they decide to move to Sydney and want to live close to the beach with 4 bedrooms, 2 bathrooms, house or townhouse, built within 5 years and contemporary. With a budget of $1.5Million this just won’t happen. A glance at median price points in the areas they desire to put them well below the average entry point, 50% below most often. The Melbourne market is a far different proposition to key Sydney locations both in the offering, and value.

Can your perception or wants be adjusted to match the locale?

If it cannot you will be wasting a lot of time. You are simply not competitive. The market does not care that you are moving from somewhere else or that you may want a better lifestyle for your family. It is about supply and demand. The vendors are typically out to receive a maximum return.

Once you have established your buying capability or budget and know you can access funds to this level then make a list of things that are must-haves – not negotiables. Where partners are involved perhaps each party should do this separately and then meet to compare notes

Then consider making a list of the core suburbs that match your criteria, then make a list of suburbs or areas that are suitable (although not perfect). Have you traveled or do you know these areas?

Research the facilities, shops, recreational, lifestyle, support (hospital, medical, parents), the schools, the best and worst streets.

I suggest creating a rating system and short notes for everything… This way after a lot of assessment you can shortlist some of your choices according to this rating and keep some perspective. A bit of preparedness and planning will save a lot of time and angst. Decision-making can be a key part of your success.

To avoid ‘out of area misconception’ prepare yourself and do some research first to get alignment with the areas. It is a big investment when purchasing a new property and deserves the appropriate attention. If you are time-poor in a busy life a Buyer’s Agent could be a great solution to get alignment and traction in a marketplace…if you are realistic.

For more information contact Gary Damp at [email protected]