Should you just pay more?
When the market is strong and prices feel like they are increasing weekly, to buy the property, should you just pay more?
This is not a simple yes or no answer.
There are many things to consider:
- Is this the right property for you?
- How long are you going to be living in this home for?
- Do you need to spend more money on it to make it work for you?
- Will the position still work in 5, 10, 15 years?
- How long have you been looking for?
- Is this the right home because you need to buy something and you don’t want to rent?
- Will this property grow with the market financially?
Depending on how you answer these questions will help determine whether you should pay more money for the property.
If the outcomes you are wanting to achieve are different to another buyer who is prepared to pay more, at certain levels, there may be a stop price, regardless of what level other bidding may be at.
Let’s look at buying on a main road for example.
For many, first thoughts about buying do not include homes on main roads. However, buyers have three main areas of flexibility when looking for homes:
- Land size
If one of the key criteria is to be near a specific school or close to family, for example, then some flexibility around the home or the price is probably going to be required.
If you don’t need to be near specific amenities or family, then there is potential once the novelty of moving into your nice new home wears off, that the road may become a concern.
To move again, without going backward financially, you are likely to need to sell the property for around 10% more than you paid to cover stamp duty (5.5%), agents’ fees, advertising fees, moving costs and solicitor fees etc. just to break even. Not to mention the additional stress on the family as you embark on the merry-go-round of open for inspections again.
Ensuring you are buying the ‘right property for you’ is the key to buying successfully.
Therefore, just because others may be prepared to pay more for a property, it does not mean you should always follow. Properties have stop limits, depending on what it is that you are personally trying to achieve.