Purchasing a property might be one of the biggest financial decisions you'll make in your life.

Paying a reasonable price can be the difference between long-term pain and ongoing gains, so it's important to take every step to ensure you're not behind the eight-ball from the outset.

Here are eight tips and tricks that could give you the best chance to avoid overpaying for a house.

1. Research the market

Before you even start looking at individual homes, invest time into researching different markets.

You may have an idea of the areas or suburbs you're interested in, but are there upcoming, less fashionable suburbs that offer lower prices right now and may generate better returns down the track?

It may sound boring but it's worth studying the data at your disposal, much of which is free on the internet.

Check median values in the areas you're interested in, taking note of recent upturn or downturn trends. Then look outside the zones you're interested in and do the same.

There may be considerable price differences in suburbs not too far away from your preferred location that also tick the boxes for what you're looking for.

Look at the usual markers for a wise purchase. These might include proximity to schools, public transport, open spaces like parks or recreation facilities, conveniences such as supermarkets, and nearby cafes or restaurants.

Meander through streets and neighbourhoods to get a feel for areas you mightn't be familiar with before you write them off as 'not for you'. Once you've got a grasp on where you would like to live, get to know the type of properties typically for sale, which tend to sell quickly, and which remain on the market for a while.

Taking the time to do your own research will give you a solid understanding of what's a good price before individual properties, real estate agents, and your emotions come into play.

2. Know your budget

Just as important as researching the market is being clear on your budget before your house hunting begins in earnest.

Again, there's a plethora of online information that can help you work out how much you can comfortably afford to borrow. Our borrowing power calculator, for instance, can give you a good idea.

This could also be the time to speak to your preferred lender to get a ballpark figure of the amount they might lend you, or to a mortgage broker who will go over your finances to give you an accurate picture of what you can afford to borrow.

See also: The most common types of home loans

This information is essential in keeping your house hunting journey on track and can save you from wasting time looking at properties that are out of your price range, or that would leave your finances stretched.

3. Remember who real estate agents work for

Real estate agents can be helpful in providing advice about recent sales in the area and identifying properties on the market that may meet your needs but remind yourself that they get paid by sellers. In other words, they don't act for you.

Vendor agents are out to achieve the highest price they can and, at the same time, sell you the dream of living in the properties they're selling. Measure what they're telling you against your own research.

If you've done your research, you'll be more confident in making an offer at a price you feel meets the market and will be seriously considered, rather than any price range the vendor's agent might suggest to you.

Don't be pressured into making an offer or be led to believe you'll miss out on the property if don't put in a higher offer than you're comfortable paying. Sometimes you might miss out, but it's better to keep your composure and let a property pass you by than to make an impulsive offer and regret it.

Build a post-inspection cooling-off period into your house hunting process (and any contract you enter into) so you can look at your options with some distance and without a real estate agent offering you free 'advice'.

4. Keep your emotions in check

One of the big reasons people end up overpaying for homes is because they let their emotions take precedence over practicalities.

It's a difficult balancing act, particularly if you're in the market to purchase a property that's going to be your home, as opposed to an investment.

'Falling in love' with a home can spell danger and lead you to gloss over other important factors such as location, proximity to amenities, and, unfortunately, price.

Try to see the home in relation to every other factor that's important in buying property and don't give too much weight to how charming or appealing you find it.

Remember the old rule: don't buy the most expensive house on the street. You could add to that quaint 'character' homes that may come with considerable maintenance issues in the longer term.

It can be very difficult, but if you're debating whether to follow your heart or your head, opt for your head.

5. Avoid bidding wars

Whether you're aiming to purchase at auction or you've set your sights on a private sale, do your best to avoid entering into a bidding war.

Auctions tend to be more popular in markets with low stock and high demand. As a rule of thumb, a seller will give you some time to do your due diligence on the property, the area, and recent sales of similar properties before the home goes under the hammer.

If the home ticks all your boxes, you can conduct a title search and a building and pest inspection (sometimes a seller will have already completed these steps and can provide you with the resulting reports).

If you're going to be bidding at an auction, keep the maximum price you're willing to pay in mind and don't surpass it.

Try not to see an auction as a competition that someone 'wins'. It isn't a win if you bid more than you're able to afford, putting yourself in financial peril.

Be prepared to walk away and know there will be other properties on the market that await you.

See also: How to win in an auction

6. Engage a buyers' agent

The property market can be a jungle, especially if you're a first-time buyer, new to an area, or simply don't have the time to put into researching properties and attending inspections.

Whatever the reason you're not confident or able to navigate the property market yourself, buyers agents can be invaluable.

They can provide expert advice on local markets, including current market conditions and property values. They can also help match your needs and budget to available properties, sifting through listings and attending open houses on your behalf, allowing you to only inspect homes that suit your criteria.

Through their contacts, they can sometimes get the jump on properties before they're listed.

They can also coordinate property appraisals, valuations, and pre-purchase inspections for you.

Importantly, buyers' agents work for you to ensure you don't pay over the odds. They'll handle price negotiations on your behalf and are well versed in the tactics of vendor agents, who may try to inflate prices in the interests of themselves and the seller (that's their job, after all).

Once the contract is signed, buyers' agents can also help facilitate the transaction process.

Buyers' agents have different pricing models, with some charging a fixed fee for scouting out a property on your behalf and others charging a percentage of a property's purchase price for a complete end-to-end service. Make sure you're clear on the cost of a buyers' agent up front.

A good buyers' agent can save you time, money, and angst in securing a suitable property for your budget by going in to bat for you and ensuring you reach your goal without overpaying.

7. Take advantage of financial assistance

Make sure you check your eligibility for the range of federal, state, and territory government grants and concessions available, particularly if you're a first home buyer or you're purchasing a new home.

These include:

A mortgage broker will also be able to provide you with advice on what schemes you may be eligible for and help guide you through the application process.

8. Remember that patience is a virtue

The person often considered to be the world's greatest investor, Warren Buffett, once said, "wealth is the transfer of money from the impatient to the patient".

The same can apply to buying property. In hot markets when homes seem to be flying off the shelves, buyers can fall victim to FOMO and feel they have no choice but to make higher offers to secure a property.

While this may seem the case, jumping in with a higher offer just because it appears everyone else is doing the same can lead to buyer's remorse.

Keep abreast of market values, but don't attempt to outrun them just to get onto the property ladder. This tactic could set you up for financial stress from the very outset.

Bide your time, wait for your best opportunities, and be ready to strike when they present themselves.

Be prepared for some disappointments along the way and to see properties sell for more than you offered, but also be confident that your time will come.

Image by Scott Graham on Unsplash

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