02 Dec VIDEO-Two ways to miss a great property bargain
There are two senses we use when we’re buying real estate. It’s because of those two senses that lead us into the two biggest mistakes we can make when we are about to make real estate purchase. The first one is getting too emotional and the second is over analyzing. It’s difficult when you are buying property for the family because it does become emotional. I am not suggesting that you should take out all of the emotion if you’re buying a family home but you do need to keep your feet on the ground because it is a major investment and one that can either cost you a lot of money or make you a lot of money in the long run. An emotional purchase may just lead you to paying too much – “we just have to have this property” – “this is where we will raise our family” – these statements are charged with emotion. Try and remove the emotion and look at it as a business transaction. I’m continually reminded of the statement that you make money from real estate when you buy not when you sell. Buying it emotionally can lead to paying too much. Many people also prefer to buy property in an area that they are familiar with, the place they grew up in or where the family home is. Those are great reasons but may not result in a good investment. The second mistake is to over analyse the purchase. This is sometimes called paralysis by analysis. I can tell you now that if you research something enough you always find the answer to justify your position on any situation. Buying property is not a perfect art and anyone who requires abundant evidence may never be satisfied enough to make a purchase. They simply become too scared to make a decision. In most cases it’s the fear of making a mistake. The best way to never make a mistake is not do anything, not make any decisions and not purchase any property. That’s not how I choose to invest or to live. Having said all that, property can be very forgiving. A mistake made today in a good market can be rectified – maybe not tomorrow – but certainly further down the track. Time in the market. Also speaking of emotion, you can justify an emotional purchase by balancing off any loss as the cost of living. How is that for justifying mistakes.