The Fear of Making a Mistake (FOMM) has affected many buyers in recent months due to interest rate rises and contradictory predictions on price. In the current climate, buyers find it hard to make decisions, and the first question they ask themselves is, “Is it the right time for me to buy?” Answering this question requires you to consider several factors.
Knowing your numbers as well as your future life plans are the most crucial elements that will drive confident decision-making. In most cases, buying a property is a long-term commitment, so you need to ensure you make the best decisions upfront. In this blog, we will share tips that will help you determine if it is the right time for you to buy a property and help you overcome your real estate FOMM.
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1. How to overcome real estate FOMM: assess your numbers
A comprehensive understanding of your personal financial situation is essential to overcoming your FOMM. Consider whether you need a mortgage, for how much and for how long? What other lifestyle factors do you need to consider financially over the coming 10-20 years, for example, children’s education? Create a high-level long-term budget or financial plan.Â
Think about your savings, where does the money come from and what do you have in reserves as cash or shares. How much you can realistically afford for a deposit, and work out what you need for the initial costs of setting up a mortgage. Most banks will ask for a deposit equalling 20% of the total property cost. Remember, you need to factor in additional costs such as stamp duty, mortgage registration fees, legal and conveyance fees, as well as mortgage application fees.
That can seem overwhelming right there, but don’t let your FOMM paralyse you! Simply talk to your bank or mortgage broker for a full evaluation of your financial situation. They will provide you with accurate advice, enabling you to make confident decisions.
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2. Define your lifestyle and future needs
Your real estate Fear of Making a Mistake might create doubts in your mind. “What if I want to move to another city in a few years? Is it worth investing now?” and so on. These are all valid questions! It’s okay to have doubts, especially considering buying a property is a significant investment. However, with proper planning and knowledge, your FOMM can be easily managed, enabling you to navigate the market with more confidence. Consider these two things:
1. Lifestyle. When buying a property to live in, assume that you will reside there for at least 5 years. Consider your lifestyle and how it may change during that time so you can determine how the property will fit the lifestyle you want.
2. Future needs. If you plan on having children, start looking for a bigger place at least 12-18 months before the newborn arrives. If you’re older and considering downsizing, think about the timing for potential renovations before selling your existing property, as well as the time needed to find a new place. Create a 12-month plan and include as many details as possible.
Remember what Benjamin Franklin said, “By failing to prepare, you are preparing to fail.” Therefore, make a solid plan to minimise the possibility of mistakes and make your FOMM vanish.Â
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3. Market and professional help: crucial elements in overcoming real estate FOMM
To overcome your FOMM make data-driven decisions. Use websites like reiv.com.au to gather information about the suburbs you want to buy in. Find out about the recent sales history of the area, including how many properties are selling and how long they stay on the market. Understand the historical growth and look for indications of future growth, such as planned investment in infrastructure.
Engaging a professional real estate agent can be a game changer in overcoming your real estate FOMM and securing the right property for your lifestyle. At Atria, we have more than 20 years of experience in real estate, and we have helped many clients achieve their property goals. Call us at 03 8680 9421 or visit our Bay Street office for a chat to find out how we can help you too
