Buy at the right time
Now that you have a good understanding of what you can afford, let’s talk about the next big question for first home buyers: When is the right time to buy my first home?
When it comes to property, everyone has an opinion—from your Uber driver to your parents, your friends, and work colleagues. But having an opinion doesn’t make them right. The same goes for market commentators on deciding on the right or wrong time to buy.
There’s always uncertainty. What happens if you decide not to buy a home because you think that prices are going to crash, only to see house prices go up another 10% next year? Or what if you buy at the peak of the market, and you’re left with a house worth 20% on paper than you paid for it?
There are two main problems here: Fear Of Missing Out (FOMO) and Fear of Joining In (FOJI)
Everyone knows about FOMO. We get FOMO from all kinds of things, big and small. If you’ve ever had an invite for a party that you weren’t super keen on going to, but you went anyway because you were worried about missing out on the potential for an amazing time, you’ve been ruled by FOMO.
You need to be aware of FOMO, because it pressures you into doing something that you might not be ready to do. If you let yourself be ruled by FOMO, you might find yourself buying a home that isn’t really right for you, simply because you’re worried that if you wait any longer you’re going to miss out on buying a home entirely. This is simply not the case. There will always be another home for you to buy. Don’t trap yourself in the illusion that you have to buy a home right now because it’s your only chance.
FOJI is FOMO’s lesser known cousin. The fear of joining in rears its ugly head when we don’t do something, even when all evidence shows us that we should do it, simply because we think we’ve missed something important and we’re going to be punished for our lapse in judgement. If you get stuck in FOJI, you’ll never get anywhere. The amount of information that you would need to evaluate for any decision, including buying your first home, is virtually infinite. If you’re caught in this illusion, you’ll always put off making that big decision, because there’s always something else that you need to know before you feel confident in your choices. We can never know everything, but this shouldn’t stop you from taking action.
The ideal place to be is somewhere in between FOMO and FOJI. If you can find that balance, you will reap the benefits of both. FOMO in small doses will give you the motivation to take action instead of simply waiting for a better time. And a small amount of FOJI will help you to be more cautious with your decisions—it will give you the motivation to do your research and be thorough with your property search.
In this chapter I’m going to show you how to take an objective look at your situation and decide if it really is the best time for you to buy a house.