In recent years, Australia's first-time home buyers have increasingly relied on their parents' wealth to realize their dreams, and they have also relied on their parents' advice to choose suburbs and lenders.
According to a recent survey, families looking for homes rely on their parents for advice more than any other source, even professionals and their own research, with 1/4 using parents as a first reference. Only 21 per cent would do their homework first, while 16 per cent preferred to ask financial planners for advice.
Given their influence, parents have a responsibility to provide sound home-buying guidance.
But more importantly, buyers need to understand how their parents may have an impact on their home choices and strategies.
Why rely on parental advice?
Bessie Hassan, a financial expert, says children often follow the example of their parents, hoping to emulate their success. "most people think that parents are the ultimate authority in their lives," she said. "so it makes sense for us to consult them on one of the most important financial decisions in our lives."
Industry insiders David Johnston said buyers were more likely to seek advice if their parents were successful in the housing market. "if parents are financially successful, including financial management and buying a house, then they should really ask for their ideas and guidance." He said。 Taj Singh, a professional, said home buyers may feel obliged to follow their parents' advice if their parents provide financial assistance. Johnston agrees, adding that it may be one of the conditions for money to be offered.
Is parental advice the best?
Ms Hassan believes it is important to understand the motives behind parental advice. "they may like to want their children to live nearby or use the same lender for 30 years," she said, adding that parents may have a completely different market when buying a home, so their guidance may not make much sense.
"I don't think all parents understand how difficult it is for current first-time buyers." "they still advise children to buy in the areas where they live, because they think these areas will never cut prices," he said.
Blindly following parents' advice can lead to the wrong path, says Johnston. Property planner Chris Bates says buyers should question their parents' experience. "something useful to your parents doesn't necessarily suit you."
What research should buyers conduct?
Miriam Sandkuhler, the buyer's agent, said buyers needed to understand the key factors that affected the local market. "take into account the supply and demand factors, as well as the people who may rent your investment house." She said.
Buyers should be aware of broader trends, Bates said. "it's important to understand how cities change and what happens to infrastructure." "buyers should avoid buying in areas where property supply is increasing and consider areas where demand is increasing," he added.
First-time buyers should determine how much they can borrow before they start looking, Singh said. "you don't have to go to the bank where your parents introduce you, because they may not necessarily offer you the best interest rates."
How do you know if you get the right advice?
Buyers "should be careful about mortgage guidance that doesn't take into account mortgage strategies, money management and real estate decisions, and focuses only on selling products and interest rates," Johnston said.
Property buyers should avoid finding experts who can get commissions to make certain investments, Bates said. "you have to be very clear about who is introducing who and whether they will get a commission." He said。
Real estate agents are motivated to get sellers to the highest prices, so they shouldn't rely on their advice, Singh said, but a lot of house-watching and a lot of interaction with real estate agents could help buyers.