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FOMO driving reckless property purchases, expert warns
Vervé Property’s Lisa Evans has cautioned buyers against falling victim to the “fear of missing out” (FOMO) and making life-changing decisions in a rush to secure property.
According to Evans, many buyers are now making “reckless” decisions, including waiving traditional due diligence such as building, pest, and finance clauses, leaving themselves exposed to potentially multi-million-dollar mistakes.
Large crowds at open homes are also giving buyers the impression that properties are worth more than their market value, underpinning poor decision-making.
“The most dangerous trend I’m seeing is the rise of the reckless unconditional offer,” Evans said.
“To compete, buyers are waiving building and pest inspections or finance clauses after just a 15-minute walkthrough. They are betting over a million dollars on a whim, treating the largest purchase of their lives with less due diligence than they would use to buy a used car.”
This approach means buyers are potentially risking their wealth on a gamble.
“When a buyer sees 30 people at an open home, they immediately assume the property is worth $50,000 more than it actually is,” she continued.
“This paranoia leads to hasty, unconditional offers without any ‘forensic’ homework. Essentially, they are paying a ‘FOMO tax’ just to stop the dreaded weekend crawl.”
The problem is further compounded by buyers relying on outdated data.
According to the buyer’s agent, information available online is often already outdated by the time it’s compiled, and doesn’t reflect the current state of the market.
It also means buyers are settling for issues that could become deal breakers.
“They buy a house with a ‘minor’ overland flow issue or a restrictive easement, telling themselves they can live with it. In a shifting market, these ‘near enough’ properties are the first to lose value because they have fundamental flaws that a renovation can’t fix,” Evans concluded.