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90 Marine Terrace Fremantle, WA, 6160

Should You Buy Established or Build New?

When we’re dealing with Clients that are buying or building a home, “getting the knowledge” and having robust discussions about their financial and property goals BEFORE they take any action can go a very long way to removing stress, frustrations, saving lost deposits, and greatly increasing the chances of our Clients being happy – with us and with the result they receive. 

Often the discussions aren’t easy… some people insist they must have a new home, even if it means significantly increased financial risk and possibly, a handbrake on their financial position and future growth.

While we like to guide and safeguard our clients as much as we can, ultimately, the responsibility for the entire process is theirs… yours!   

I’ve earned the qualifications to have these discussions because my first job out of university was a 4-year tenure selling high-end real estate in the busiest residential property office in London. 

More recently, I spent four years in Melbourne as a Partner in a property investment advisory firm whilst Mortgage Broking at the same time.

Further to that, 200-250 phone calls each and every week with all sorts of property buyers, developers, owners, agents, accountants and industry people give me real-world insight into the marketplace.

Over the years, myself and my family have done quite well out of property… and I can tell you who does well… and who gets their fingers burnt.

One group that has suffered tremendously, especially in WA and parts of QLD, are thousands of people who have bought a new house and land package in the wrong fringe or developing area. 

Some unfortunate buyers have been stuck with an asset that has declined in value for 6-7 years straight. Coupled with poor credit management (long loan terms paying the minimum, car loans, unsecured debt and so on), the result is an absolute disaster for their Financial Security. Like, they don’t have any…

It’s your call if you insist on buying an artificially priced house and land package.

It’s also your call if you over-capitalise by building a fancy new gaff in the wrong area and the valuation doesn’t come in at the right price, meaning you risk losing the deposit paid to the builder, you have to renegotiate the contract with the builder, or worse, you stubbornly push ahead out of emotion and find yourself in that most precarious of positions – borrowing money from “someone” to make up the difference between what you owe the builder and what the bank will ultimately lend you, negative equity or an uncomfortably high Loan to Value ratio. Either way, these outcomes suck. 

If you must have a new home, then my recommendation is to buy a newly built home in an established area. With the tools and contacts that we have, we can accurately evaluate if the price is fair, before you pay a cent to anyone. 

If you can’t find what you want and insist on building to avoid paying stamp duty or get the First Home Owners Grant, then please find a good block in an established area and get umpteen building quotes and whatever you do – do not overcapitalise!

  • Remember! You can get the FHOG for new properties that are built but have not been lived in. 

Buying a house and land package in a poorly chosen new area is a one-way ticket to financial pain, stress, frustration and a decade-long delay in the building of your wealth.

Be smart. Think unemotionally. Consider ALL the options. 

Are you a home buyer wanting to get it right the first time, make money out of your investment and avoid mistakes? 

We can help with “seen it all before” advice and recommendations, also, we can help with introductions to trusted builders that have delivered on time and on budget for our past clients. 

We have a very limited number of appointments per week and they book out fast so >>schedule yours today<< to ensure you get a time slot that suits your schedule.

Brodie Brown

Professional Mortgage Broker