The Importance Of Mindset This Spring
Ah, spring has sprung, how good is it to know that the weather is starting to warm up, even if it is only a little so far?
Spring is often a time that property markets also change their colours, and for good reason. Everything looks better when the sun is out and the air is warm, especially a well-presented home for sale, right?
There has been a lot going on in recent months to prepare the property market for a bumper spring… but you need to be aware of some key traps.
First, let’s have a look at what has happened over winter. It is always good to know where we have come from, to understand and appreciate where we are going.
Unless you have been living under a rock, you will know there have been a couple of interest rate cuts during winter. Two cuts of 0.25% each by the Reserve Bank have been welcomed by most. Unfortunately, the banks continue to hang on to some of those cuts to prop up their profits, cause a few billion each isn’t quite enough…
Across all the banks the extent of the cuts being passed on to borrowers has ranged from between 0.35% to 0.45% per annum.
Next, there has been the relaxing by the banks of some of the strict lending conditions that were introduced as a result of the banking royal commission. These restrictions mainly relate to property investors, which were welcome relief for those looking to grow their wealth and secure their financial future using property.
These two items have resulted in more activity in the property market toward the end of winter. However, the activity has been mainly on the buyer side, and not so much the sellers. Auction clearance rates have returned to over 70%, however the number of properties for sale is still below historical averages for this time of year.
So what does that mean for spring?
If you are going to be an active buyer or seller in spring there are a few mindset matters that you should be wary of to help you get the outcome you are looking to achieve.
Mindset matters in property
When it comes to success with money, and particularly property, there are some key money mindset matters worth noting.
Remember that classic Warren Buffett quote about being fearful when others are being greedy, and be greedy when others are being fearful…
Property markets are no different, they tend to be driven by fear and greed. Fear of missing out, or the greed of having to have it, no matter the cost.
So what can you do to manage your mindset this spring?
1. Be realistic
Yeah, yeah, I’ve heard that before…
While you have seen what has transpired over winter, including the points noted above, the fact is, prices have been falling in most capital cities.
The recent events have seen either a slowdown in the rate of prices declining or slight increases in some cases.
So if you are a seller, you need to be realistic about what price you can achieve this spring. The simple facts are that prices are not likely to rise dramatically just because the weather has warmed a little.
Similarly, if you are a buyer, you need to be realistic about chasing that bargain. Prices have steadied and are likely to be buoyed by the changing conditions in lending, meaning the bargains are going to be harder to find.
Being realistic about what you are trying to achieve will help avoid making irrational decisions that could cost you a lot of money this spring.
2. Remain positive
As I mentioned earlier, fear is a big factor when it comes to money matters. Not necessarily a good thing either.
This spring being patient and remaining positive will be valuable traits to have, despite all that I have said about the changes to the property markets.
Throughout winter there has been a noticeable increase in the length of time it is taking to sell properties. The days on market data has steadily been increasing.
Now, spring could change all of that, and it has a history of being a stronger transaction period. Just be mindful if you’re not getting the outcome you want as quickly as you want.
Patience in the property game will also result in saving or making you thousands of dollars. Fear and greed…
If you can be patient and remain positive, the fear and greed of others will play into your pocket. When you are dealing with large sums of money, like those involved in property transactions, remaining positive and patient can result in some very handy dollars in your pocket.
I recall a property transaction of my own a number of years ago when I was buying. I had done my research and had a good idea of what I believed the property was worth. I had the comparison data, the suburb data and a good feel for the market at the time.
The seller was holding out for a higher price, and the agent was doing his thing to entice me to make a higher offer to get the sale done, including advising me it would not be done at the price I offered. Instead, I continued looking at other properties on my watch list. Just one week later the agent came back to me to see if my offer still held, it did. After a few phone calls, the deal was done at $10,000 less than what the agent was suggesting would get it done, just 7 days earlier.
For no work on my part, I saved or made depending on how you want to look at it, $10,000 in a week. Not bad, and all by being patient and remaining positive about what could be achieved.
3. Picture the outcome
This one is a little more woo woo, but heh, it works for the wealthy, so who am I to argue with their methods.
I discovered this technique from the great book, Think and Grow Rich by Napoleon Hill, and in more recent times The Alchemist by Paulo Coelho.
One of the best money mindset techniques available to us all is to picture the outcome you want and then go about taking the actions required to make it happen.
By having a picture in your mind of the outcome you want, you activate your subconscious and the parts of the brain that will support you in your actions to achieve the outcome you desire.
If you can concentrate on that picture and reflect on it daily, you will inevitably take the actions required to bring that picture into your reality. That is, you will make it happen.
The key to picturing the outcome you want is that it isn’t enough to just think about it. You have to act as well.
The other trick to this step is that you need to let go of the outcome as well. Trust that it will come to you, with the actions you take and forget about focussing on the dollar figure outcome.
A good example of how people use this technique is car parking spaces. Do you have a friend or family member who always seems to get the car space right out the front of the venue, even on the busiest of days?
This is because these people picture the car space they want, believe that it will be there and then just get in the car and drive. They don’t worry whether a space will be there, they just know it will. I had a father-in-law that did this all the time, it was funny in the end how often he could pull it off.
So this spring as you approach the property market, either as a buyer or seller, remember these three key mindset matters, be realistic, be patient and remain positive and picture the outcome you want to achieve.
It could make you thousands of dollars!
Andrew Woodward is a mindshift.money accredited money coach based in Sydney who teaches people to take control of their money and invest for their future, simply and efficiently. Take the Money Health Score quiz at https://start.theinvestorsway.com.au/money-quiz