Avoiding the 5 most common mistakes

Is the road ahead unfamiliar, as you contemplate buying or selling? Here are ways of avoiding mistakes that can block a smooth road to success.

Indecision at the Start

Indecision acts like a roadblock to achieving any goal. You may want or need to make a move, but it’s hard to act till you clear any indecision out of your way. You are caught between wanting or needing to act and uncertainty about committing yourself to action.

This problem is particularly common when you’re thinking of buying or selling a house. You get excited about the thought of a new house, perhaps in a new area. For whatever reasons, your present home doesn’t meet all your needs. But you soon realise you have to consider so many things if you’re going to move. You’re still excited but doubts start emerging in the back of your mind – indecision has raised its ugly head. Deal with it promptly to stop it getting in your way, slowing you down and stressing you out. Here’s how!

Get rid of this handicap right at the start when you first think of moving. Don’t start looking at houses. Don’t start talking to estate agents. First up: do a careful and thorough pros and cons assessment, so that you can come to a clear “policy decision” about the move. Is moving to a new house the best thing for you to do right now? Does it make sense? Are there enough reasons for doing it? Will everyone involved get enough benefit to make it worthwhile?

Only when you’ve considered every sort of impact a move would have on you, your family, relatives, friends (and even pets!) will you be able to make a clear “policy decision” about pursuing a move. If you’ve done a thorough ‘Pros & Cons’, and the advantages clearly outweigh the disadvantages, and you’ve convinced yourself that moving is the right and best thing to do – then you’ll be free of indecision. You can face the many practical issues and decisions ahead with complete peace of mind. You’ll feel strong and confident to deal with everything that faces you from that point on.

Under or Over-Estimating the Market

This is a mistake that’s very easy to make and can cause a lot of pain. How come? Firstly, the market is constantly changing, and secondly most people have limited access to the full information you need to correctly interpret the market.

Most people are likely to simply look on the Internet or in the local paper to see what houses are selling for, and they may go to one or two auctions in the neighbourhood. While they will get some some impression of the market, they could well come to wrong conclusions.

Understanding the market requires much more ‘homework’ than many people are likely to do. Let’s face it: some serious decisions have to be made when either buying or selling. Someone who underestimates the market may miss out on buying a house that would be ideal for them just because they thought the owner was being unreasonable about the price. Then someone else offers a bit more and buys ‘their’ house. Another danger of underestimating the market is that it could also lead a person to accept an offer for their home that is less than the price they should have got.

But there’s also a danger in overestimating the market: you could pay more for a house than you should have paid. Or you might reject a perfectly good offer for the house you’re selling and then struggle to find a buyer anywhere near the same price.

There’s never time to think or calculate when it comes down to the finish line in a purchase or sale situation. You must have done your ‘homework’ well in advance so that you can have a clear, confident and relaxed mind when you need to make such decisions.

The way to avoid the ‘under/over estimating mistake’ is to take a very disciplined and methodical approach to building your knowledge of the market. And start this process several weeks or even months before you have to face those big decisions about buying or selling.

Financial Uncertainty

Like indecision, financial uncertainty can also block your path and hamper your progress in making a move.

The common mistake is to start looking at possible houses to buy before working out exactly what your financial position is. Until this is fully settled in your mind, you won’t be able to think clearly about any house you look at. It’s like driving your car with the handbrake on – it just makes things difficult.

First free yourself from this handicap by talking to your accountant, banker, mortgage broker, wise uncle – anyone who can help you get a clear picture of where you stand financially and how much you can sensibly afford to pay for a house.

With a clear understanding of your numbers, you’re in a stronger position to move forward confidently to the next step in your journey—deciding exactly what you want in your next home.

Confused Needs or Wants

Whenever we think about buying something, we usually have a rough idea in our minds of what it will be like. We begin with the general idea of what we want and then go through a process that leads us to a final decision.

If the process we follow in preparing ourselves for the purchase is thorough and detailed, making the final decision is quite easy. To illustrate the point, it’s a bit like buying a loaf of bread. Say we’re not the usual bread-shopper in the family, but on this occasion we’re asked to buy the bread. With even a simple purchase like this, we’re going to be faced with some choices.

When we stand at the bread rack in the supermarket, with a dozen different kinds of bread on offer, things can get complicated. Which one should we buy? Will we choose the wholemeal, multigrain, plain white or rye? Should it be crusty or soft? Organic flour or plain? Gluten free or regular? Do we want it sliced or unsliced? Sandwich thickness or toast thickness? Brand label or store label?

It can be surprisingly confusing. What seemed like a reasonably simple task suddenly becomes a headache. Nevertheless we battle on, make those choices, select a loaf we think will please the family, pay for it and trot off thinking we’ve accomplished our task. We get home with the bread – but nobody likes it! Oh well. Even though we got it wrong, we can go back next week and get what everyone wants – no big problem.

But when buying a house there’s far more to consider, far more choices to be made. And if we get it wrong, we can’t go out and get a different one next week. If we’re confused about what we actually want and need in a house, making a final decision to buy is going to be both difficult and risky.

The common mistake people make is to look at houses too soon. It’s best to sit down, carefully analyse our requirements, write them out, and check them with everyone involved. Then we can draw up a final ‘ideal home specification’ as a template we can use to pre-qualify houses worth looking at.

If we do these things first – instead of diving in at the deep end, searching the Internet, looking through the local paper, attending auctions, going to open for inspections in a confused state of mind – we’ll easily pick out the right houses to look at and consider buying. This way we’ll waste no time, effort or petrol going to look at unsuitable houses – which can be disappointing and frustrating

The best way to avoid such confusion is to take a very disciplined and methodical approach to defining, as close as possible, our specific requirements in a house. And it’s best to start this process several weeks or even months before we’re going to face that big buying decision. A good way to start is to download this free worksheet that will help you work out what your ‘ideal home’ would be.

Disagreement in the Ranks

Whenever there’s more than one person involved, making any decision immediately become a lot more complicated. Everybody is different and approaches a decision from slightly different (or vastly different!) angles. When the decision that has to be made will so significantly affect the lives of all involved, it can be a recipe for disaster if there’s disagreement in the ranks.

A prime example of this occurs when we have to make the decision to buy or sell a house. So much is involved that the potential for disagreement is extremely high.

Many people don’t realize how important it is to get as much agreement as possible between all who will be affected by the decision to buy or sell. The greater the consensus, the easier it is to make the decisions—and the better the outcomes will be!

The best way to avoid the roadblock of disagreement is to build consensus, step by step, along the path to the final decision.

The starting point is with the pros and cons of making a move. Ideally each person involved should sit down and put on paper their own list of pros and cons. Then by comparing notes we can get a very good idea of how everybody feels about it and most importantly each of us can get an understanding of the others’ points of view.

Once agreement is reached on the pros and cons, we can look at the sales data and also reach a common understanding of where the market is at the moment.

With a shared understanding of the market, we can then look at our financial position and get a clear picture about where our limits are, and the price we’d be comfortable selling our current house for, or paying for our next house.

Having agreed on our financial capacity, we can go on to discuss exactly what kind of house we’d like to buy next and work out our “ideal home” specifications. With a clear price range in mind, we can each begin to define our other requirements — the accommodation and features we want. The best way to reach agreement on these things is firstly for each person to sit down and complete their own Ideal Home worksheet. Then by comparing our worksheets we can draw up a combined list, which will reflect the interests and concerns of everybody involved – and provide that vital agreement we need on the way forward.

This approach will provide excellent opportunities for building consensus along the way. It will smooth the road ahead towards the day when big decisions have to be made about buying or selling.

Whale & Co