First there was FOMO (Fear Of Missing Out) then came FOOP (Fear Of Overpaying) but it seems uninitiated buyers have another source of anxiety according to new research.
FOAN, or Fear of Awful Neighbors, is on par with loan rejection for first-home buyers.
Finder’s First Home Buyer Report revealed 35 percent of first-time buyers are afraid of bad neighbors, just shy of the 36 percent who feared being rejected for a loan.
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Buying in the wrong location, or committing to an address long term were among other worries.
Finder home loans expert Richard Whitten said buyers are often attracted to a location because of its sense of local community.
“Having nice neighbors is a universal desire – Australians want to be able to let their kids play with the family next door or swap gardening tips with the local green thumb.
“A friendly neighborhood is also often a safe neighborhood, which is a priority for more than a quarter of first-home buyers,” he said.
Although today’s buyers have access to more information than generations before them, Mr Whitten said researching who lives next-door or upstairs is challenging.
“We always say at Finder that you should compare home loan rates, do your homework and due diligence but it’s very hard to guess what the neighbors are like,” he said.
“When most people buy a house, and especially during the boom of the last couple of years, they really only do one or two inspections.
“You might get lucky and see someone out the front or maybe make a snap judgment based on the appearance of their front yard, but that’s about it.”
One tip for buyers looking to purchase an apartment is to study the strata report or turn to a professional.
“It’ll cover the goings on in the building and could mention any serious disputes among neighbors, even if it doesn’t tell you much about them individually. Online reviews or Facebook groups can also help for larger buildings so it’s worth sometimes just Googling the address.”
Buyer’s agent Michelle May agrees that a little internet digging is essential.
“I commend first-home buyers for even thinking about neighbors because it’s actually something that can completely ruin your enjoyment of living somewhere,” she said.
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“If you’re surrounded by anti-social neighbors then you’ll be moving faster than you may think.
We join local Facebook groups and scour for buzzwords like; disturbance, police, noise, or parties.”
It’s also important to understand that, in many states, vendors need to disclose if there are any official disputes going on, Ms May outlines.
“That’s something you need to look for in your due diligence so speak with your conveyancer and get them to talk to the vendor’s solicitor.”
Savvy buyers should also consider visiting the address at different times to get a true feel for the neighborhood beyond what the selling agent wants you to see.
“Whether it’s to find out about neighbors, or to hear flight path noise, go and sit in your car and just listen and watch what’s going on. You can’t take this kind of research too lightly because if you make the wrong decision and do want to sell in the future, it’s going to be a headache — especially in a market like this one where buyers can be, and should be, more picky.”
Finder’s First Home Buyer Report also found that fears of not qualifying for a mortgage in the current rising interest rate climate were growing.
Regional buyers were more likely to be concerned about getting approved over city slickers (41 percent compared to 35 percent).
“Applying for a home loan can be nerve-racking, but there are things you can do to increase your odds of approval,” Mr Whitten said.
“Your lender will look at your financial statements and spending behavior, so it’s a good idea to avoid splurging too much in the months leading up to your application.”
The Finder expert also added that it’s a smart idea to check your credit score – this is what your lender will look at to assess whether you’re a good borrower, and it can also impact what interest rate you get.
The research also found younger buyers were more concerned about the lack of flexibility that comes with owning a home. Nearly a third of Gen Z (31 per cent) and Millennials (30 per cent) fear committing to the same property or area, compared to 20 per cent of the older Gen X.
“I guess it’s human nature to fear buying the wrong place, at the peak of the market, or even having bad neighbors,” Mr Whitten said.
“You can’t worry so much about what the market is doing in the short term because if the property suits what you need right now, that’s more important.
“The reality is, you might not be able to tick every box the first time around, but have a five or 10-year time frame and then buy something that suits you for that period, then re-evaluate after that.”
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