With house prices rising, how does one get around with paying less or earning more?
Behavioural economics have provided some insights on how to save tens, hundreds, or even thousands on a home. Many irrational factors affecting how much people pay for a home have been discussed.
Auctions are generally preferred over private treaties, especially for homes which are larger, in more expensive neighbourhoods. The reason being because many factors can be used to influence the selling price.
On auction days, a sunny day is said to rise the final price by a few thousand dollars compared to an overcast day. While during an auction, studies show people can become more vulnerable due to the pressure created during the auction. This can result in many going with their gut feelings and overpaying. This is also known as the ‘winner’s curse’.
Ongoing property crimes – such as vandalism and graffiti, lower prices due to the lack of desirability. The same occurs for more serious one-off crimes – such as murder. For about a year, the overall area around the murder’s house is said to fall by 5%.
Areas near airports, in general, are cheaper in price due to the noise pollution. Studies show that the more noise present, the greater the discount on prices. For houses directly under plane flight paths, prices will also be significantly lower due to the chance of a plane crash.
Houses within school zone areas can be sold for a higher price, especially for schools which are more popular. Many developers purposely target properties near schools which are more desirable.
Before you decide to buy/sell a home, consider all the factors above to ensure you seal a great deal.
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