How to Avoid Overpaying for Property: The Biggest Mistake Buyers Make
Buying property in Sydney is a high-stakes game, and for many buyers, the fear of missing out (FOMO) can lead to costly mistakes. One of the biggest errors buyers make? Using previous sales as an anchor for what they think a property is worth - without questioning whether that sale was rational in the first place.
Image: R Architecture
The Problem with Using Past Sales as a Price Guide
It’s natural to look at comparable sales to determine a property’s value. But what if that previous sale wasn’t a fair deal? What if the last buyer got emotionally carried away at auction and overpaid? If you use that inflated price as your benchmark, you could be repeating the same mistake - and adding another layer of overpayment to the market.
Let’s put it another way: If someone paid $5,000 for a chair in The Acquiry’s office, does that mean the other chairs are suddenly worth $5,000? No - it just means one buyer was willing to overpay. The same principle applies to real estate.
Image: Steven Ungermann
How Overpaying Happens
There are a few key ways buyers end up paying more than they should:
Auction Frenzy: The competitive nature of auctions makes it easy to get caught up in the moment and bid beyond your original budget.
Emotional Decision-Making: Falling in love with a property can cloud judgment, leading to an offer that’s based more on desire than market reality.
Anchoring to an Inflated Sale: Using a record-breaking, emotional purchase as a price benchmark instead of assessing the property’s true value.
Image: R Architecture
How to Avoid Overpaying
Work with a Buyer’s Agent – Having a professional on your side can provide objective guidance, helping you assess true market value instead of relying on misleading price anchors.
Look at Multiple Data Points – Don’t rely on one recent sale; instead, consider broader trends in the area, similar properties, and longer-term pricing history.
Remain Objective – It’s easy to get emotionally attached, but real estate is a financial decision first and foremost.
Be Strategic About Auctions – Know your limit before you go in, and don’t let competition push you beyond what’s reasonable.
“Sydney’s property market moves fast, and competition is fierce. But that doesn’t mean you have to fall into the trap of overpaying. By questioning price anchors, staying objective, and seeking expert advice, you can make a smart purchase - without inheriting someone else’s costly mistake.”
If you want expert guidance to ensure you're making the right moves in Sydney’s property market, reach out to The Acquiry today.