This video features a conversation with Kirsty, a first-home buyer who navigated a four-year pre-approval period before purchasing her property. The discussion highlights the common challenges faced by first-home buyers, including information overload, the emotional aspects of buying, dealing with agents and brokers, auction realities, and the influence of upbringing on financial decisions. The episode aims to provide insights and lessons for others on a similar journey.
Here is the transcript of the video:
I I'm trying not to have that over analysis paralysis.
Ask for the rules of engagement. So if the if the selling agent is saying it's your best and final, then you want to be 100% sure. That's where a good buyers agent is worth every dollar that you pay them. You're tuning in to the Property Couch, Australia's number one property, finance, [music] and money podcast featuring the titans of the industry since 2015. We're trusted by tens of thousands of investors on their journey to financial peace. This show is powered [music] by more. Thanks OPI and welcome to another episode of the Property Couch, Australia's number one property podcast. And look, I'm really excited about today's episode because it talks to a lot of challenges people have when they have paralysis by analysis through procrastination. So, you're going to hear a story of someone who did a lot of research, uh, was very, very diligent in the approach, but eventually then got the confidence to take action. And that's what really we're here to do. We're here to educate you in taking action. Now, before we get to it, I also want to talk quickly about the more platform. So, this is a free platform that we've built for individuals and households to organize their finances and control their money. And so, it's completely free to use. You can download it from the app store uh in the iOS or the Android app store. So if you want to get in control of your money, trap more surplus. And at the start of the year, we did talk about obviously our surplus challenge. So why not check it out if you're thinking about that and especially for households that are running mortgages and in a rising interest rate environment, getting on top of your budgets is going to be really important. So, just a little shout out. If you want to get yourself organized, move away from spreadsheets and get really sophisticated and get a certain level of insight that you've never seen before, all at the fingertips of our platform, you can do that at more.com.au. That's mr.com.au. The details are in the show notes. Now, let's cut to an interview that KD and I recently had with a first home buyer taking the big leap into the property market. So, good day everyone. Welcome back to the property couch. Uh this week we've got a new couch crew. It's exciting. Always love having these titans of industry and new special guests and that's exactly what we've got here today. So welcome back KD. Thanks so much for having me. I'm excited to sit on the couch. Fantastic. And we've got a special guest. Would you like to introduce them? Absolutely. So I felt like in this iteration of people sitting on your couch, it might be helpful if everyone was called the same name. So [laughter] I'm Kirsty. This is Kirsty. And Kirsty and I know each other. We've known each other for a long time now, haven't we? Yeah. How long would you say it is? At least eight years. At least eight years. But we just met today. First time face to face meeting. First time. Yeah. And I was privileged enough to help Kirsty on her journey towards home ownership. Yeah. So that's how we know each other. I'm going to talk about that today because I feel like there's so many nuggets of gold in her journey that can be helpful for so many others. So, thanks for having all the Kirsty's on the couch. Well, it's true. And I think it's important that we do recognize that there are people who are going on this journey with limited amounts of knowledge and as part of that they need a holding hand. And and I think this story because it is a longer story for you Kirsty in terms of the journey that it took you is worth unpacking because if you're going to be out there helping people you know relate to your story um hopefully we can get them over line to get on the property ladder as well. So let's don't talk about some time frames because I think that's one of the things that makes your journey so remarkable. So, we met, you reached out and said, "How about we work together, me as your broker, you as a future buyer, and then you have the distinguished honor of being the client I had preapproved and ready to buy for the longest period of time." And one of the things I loved about your journey was that every single time we caught up, every six months or so during that process, because you were pre-approved for about four years, I think and um every single time we caught up, you had done more and more to improve your situation. You'd saved more. You had promotions at work. You were being so sensible and so cautious. But maybe let's talk about that. How did it how did it feel being preapproved and ready to buy for so long? Um, at the start it was um a lot of a lot of viewings, going to open in for inspections, talking to a lot of exciting real estate agents. That too and learning things along the way like not giving out my game plan. Um, looking at different things. um getting at the same time getting lots of advice from uh friends and um different their different experiences and I think along the way it all just became a little bit overwhelming and information overload. So we mentioned earlier that 4 years for a preapproval is a long time. Um I want to sort of double click on a couple of those points. The first one is um what triggered you to get pre-approval? So tell us a bit about your story where you're Melbourne based um you're renting with someone, but what triggered you with this idea of home ownership? And did you ever have that aspiration? Absolutely. Yeah. Um I'd had that aspiration for a long time before I even reached out to Kirsty. Um I was in the rental market for a very long time. I did things to help um build my savings along the way. So I did a lot of sharehousing to cut costs. Um I didn't do a lot of travel to save money. Um so I put some of those things in my life on hold, but it was important to me to have something that to call my own. Yeah. Yeah. Yeah. So and there was a there was a trigger event there, wasn't it? in terms of even though you had aspirations for it, you're on this deposit saving journey, but something happened that accelerated um your need to potentially start looking. Yeah. So, pretty much at the time um I was in a share house situation. I was subletting a room um and my housemate um who I didn't think um had any aspirations to h um purchase a property. uh she she informed me that she'd just bought and was moving out in a month's time. So, [laughter] so just straight away, bang. Just straight off the cuff, she just tells you so you no leadup. No leadup. No, no, not and so quickly unpack what she'd done um to actually get to a stage of of buying a house. Uh so she had actually um found a buyers agent. Okay. Yeah. And um they uh did everything for her. Um and yeah it was um all very quick and not what I was expecting um because I think you know in my um time there it might have been four or 5 years we were sharing I'd um I was looking for a lot of that um time and I was quite transparent about it. So yeah maybe you motivated her in a subliminal way and then she took [laughter] action. Maybe maybe it rubbed off. And so then seeing your housemate go from happily sort of share housing to straight into the property market. It felt like at the time working with you that almost lit a bit of a fuse under you because you weren't working with a buyer agent at that time, but that was kind of the impetus for you to get out there and chat to a buyer agent as well. Yeah, absolutely. Because it wasn't happening for me by myself. Um not for lack of trying. No. [laughter] And look, I'm just one of those people that I, you know, I was getting bits of information from all around me. And as I said, it just became a little bit overwhelming. So, um, when I found out that, oh, this room that I'm renting is not going to be available in 30 days time, I just had the carpet ripped out from under my feet and I had to had to take immediate action. Yeah. And the timing as far as it being ideal from memory, we were right before Christmas when all of this happened as well. So [laughter] yes, that's a chaotic time anyway. And then suddenly to go from not zero because you were pre-approved, you were ready, you know, you had that solid pre-approval in place, but to go straight down to a contract, it happened quickly. tell us about your experience working with a buyer agent and how it went from almost zero to to the finish line so quickly. So um the buyers a my buyer's agent um did a lot of um did a lot for me. So I I went and viewed the properties and I said look you know this is what I'm thinking. This is what I'm thinking. And then they um they would go and have a look or say no no no not not because of this. And um they um yeah they were very um they liked to communicate with me a lot. Um there was a lot of emails, phone calls, a lot of back and forth. Um again I think because it was all so compressed after that 4 year time. It just it it was quite um overwhelming for me. Um, and I I think that um I would probably um if I was going to use a buyers agent again, I would probably spend a bit more time finding someone that was a little bit more my style. Yeah. To work with. Cuz because you made a connection um even though KD was broking out of Tasmania, you're Melbourne based. Yeah. tell us about how you guys connected and also when you got that first pre-approval, what was the dialogues that were going on then about price point, affordability because what I'm interested in four years is a long time, you know, as Katie's longest in terms of going through that process. So, I think there's there might be some lessons in there for our community around um what was, you know, what what was the the steps that you needed to make to have the confidence. Now, at the end, it was rushed and so that felt a little bit uncomfortable. So, there was still some some learnings to be had in there. But yeah, tell us why why don't you tell us tell us why you love me. No, [laughter] why I love you is because you were the third broker I approached and I don't know if I ever told you. Didn't you? I shopped around. That's awesome. I love that you [laughter] did that. Um, the first two before you were recommendations. Um, and they were very, the very first broker I approached, um, they, um, explained their process to me. Um, we met, we talked it through, and I was expecting them to come back to me with a couple of options. They just came back to me on email with a half completed um, application form. So, they had made decision, not even a not even a lender choice, just this is where we're going. Yes. Um, and that left a bad taste in my mouth. And I knowing you're someone that really likes to understand everything, I can understand why that wouldn't have worked for you. So then um I went on to my next recommendation and um I told them, you know, this is what I'm looking for. And they pretty much they were probably not the right broker for what I wanted. Um they were trying to take me down a path of investing, which I'm not against. Yeah. Um we've had heaps of conversations about investing. We have. Yes. So um that was um they were very much you need to come back to me when you've got more money. Um and just I I felt like they went in my court. So So can can I ask a couple of um qualifying questions around that? Um was there something in the the goal setting conversation that you had at the start? like like at the end of the day, you know, as a broker, our job is to try and understand your goals and try and serve up those. When you were talking about your getting on the property ladder or your property journey, was there any triggers that you thought that you said to them, whether you had a smaller deposit or whether you said you want to eventually build up a portfolio? Like, was there anything in there that gave them a clue for them to run towards investing in property or cuz I mean, I don't believe so. I was very transparent from the start. and they were actually like I left that conversation thinking oh maybe I should just rent vest and not but my heart wanted to home my own home. Yeah. So then um I remember back when I was in Tazzy actually reading about um Kirsty and um did some research and uh reached out to Kirsty when she was at Uploads um and said will you will you be my broker? Will you be my third choice? No. [laughter] And my best choice third third best and final. Obviously, you know, there's a certain way that I worked with people, and I don't intimately remember our first conversation, but what was it that made you feel comfortable enough to say, "Yes, I'm happy to work with you on this journey." You just you you had my back. You were in my court. That warms my heart to hear that because Yeah. you just um you made me at ease. Um yeah, you didn't try to take me away from what I wanted. And it's funny because I I love investment properties and like I said, you and I have had many conversations about investment properties and I do vividly remember having that conversation with you numerous times that this was going to be your home, but we were going to protect you in case you wanted it to be an investment property in future, which is where we had conversations around offset and and where to put your savings and all of that sort of stuff. So it wasn't about shutting any doors towards investment but it was about making sure that you got what you needed but that we also future proofed you in a way. Yeah. Interesting. Yeah. So what was what was the budget when you did the first pre-approval? Do you remember? Oh it would have been I think it would might have been 600 580 and 600. Yeah. Okay. And did you have any dialogue around what that might buy you or where to buy or any of those types of things? um a little bit. Um so Kirsty always um encouraged me to if I found properties send them through. They could provide some um market information for me. Um just in terms of um at that time Melbourne was a very auction market. So and still is. Um but um it was just good to to get that um understanding because for me my experiences were that I would go to um open for inspections. Um but all the properties were going for a lot more than what they were advertised as. And it just took me a long time to understand you need to add 10% to everything. Whatever it's in, you know, whatever that top ceiling is, add another 10%. And I'm sure I would have told you to not only look at properties, but go back and look at the prices that they sold for afterwards when you, you know, didn't end up getting one because just to get your head in that game because the beauty of looking in a specific area, a specific type of property is that you can become a real market expert as long as you're giving yourself that data. And like I said at the beginning, you're someone who likes to have all the information. You like to feel really well informed. So, I'm really glad you took up that option of getting the market research and the comparables as well. Yeah. Yeah. Well, it makes a lot of sense because yes, for rookies when they're starting out, they they normally get the order around the wrong way. They they go looking first and then they see whether they can afford it second. So, having the pre-approval first, but obviously, as you know, when you get on those search platforms, it's a it's the entry level price. It's not what it's going to be sold at. So, you then worked out to put 10% on that and then then adjusted. Did it did it adjust the area or the type of property? like were you hopeful of a house or a townhouse or a villa unit or then or an apartment or did you remember you know how you made that selection in your mind? Yeah. So look I think for the um area of Melbourne where I was looking it was very much only ever going to be an apartment. Yeah. Okay. A medium density high density. Do you sort of have a very small block? Um I was only interested in small blocks. Um no high Yeah. Not interested in the high density. not for me. And so with the six monthly check-ins, do you remember um you're obviously saving really well? Um but it's taking you time to process all this. So do you are you one of these people who think that you're naturally risk adverse? And if you are, where do you think that risk aversion comes from? Um look, it's probably my upbringing really. I mean, um, I've always I always make careful decisions and as Kirsty said, I like to have all the information. Um, so it can be, um, I'm trying not to have that over analysis paralysis. Um, but I think during that 4-year period, there were times when I did, um, I have to be honest. Yeah. Um, and a couple of times where um, properties um, I didn't win an auction. Um that was that was hard and um and hard because financially as well you know I had the building and pest inspection and those costs and then not winning the auction and then starting again you know so it's all it was kind of a a step forward two steps back um for that and auction culture is brutal for first home buyers. Oh yeah, it really is. Especially like not a lot of people would have been as as well organized as you and getting those reports and and incurring the cost, but it's because it's so unique to Melbourne that there's such a a plethora of properties going up for auction. I I think it's really tough for first home buyers, so good on you for navigating that system anyway. Yeah. But you you said you went two steps back after a loss. Okay. So you you're quite particular about what you're buying. Um in in hindsight when you reflected on um were you the under bidder on a couple of those like were you Yes. Yes. So so one was a dut is it Dutch auction that they call them where best um high best and highest where I was ready to go to the auction on the weekend. They brought it forward and said give us your best offer and so sometimes they're referred to as boardroom auctions as well. Um, but it is your highest and best is what they're looking for. But if you ever get into that situation and anyone in the community who does feel like that's the case, um, auctions are very transparent. That's the best part about them on the day. But if you find yourself going to a boardroom auction or, you know, an auction, ask for the rules of engagement. So if the if the selling agent is saying it's your best and final, then you want to be 100% sure. Like in other words, so if I give you an offer and then you come back to me and say I was unsuccessful, but then I give you another offer, you won't accept that offer, that's when you'll see whether it's best and final because a lot of the professional negotiators will play that game like especially if you're a good buyers agent, you'll know when you're going into those boardroom auctions as well that they say best and final, but at the end of the day, the vendor wants the highest price. So there's always potentially that. So if I'm sort of saying cuz some of them will do it that you know where they'll pass the offer around like your offer is not as high as the other offer and so we're asking for offers higher than that are you in or out and then they work through that until they eventually get to the highest offer. The best and final one is a little bit more uh less transparent and that's not an easy way to play. So I always try and encourage you know if you're buying direct or using a buyer if I'm the buyers agent can't we just like just go around and get your best offers? I don't want to play games. I want some transparency in the in the transaction. I'm here to buy for my client. So, if you do it that way, I'm more inclined to actually put my best offer forward as as it works out, but I'm not going to pay overs. Do you know what I mean? So, it's always about now see how that respond and how that works. You got to play by their rules at the end of the day. they've got that control, but sometimes they will go, "Well, if we we've called this boardroom auction and there's two or three in the room, but they know that they've got a low-end buyer and they're sort of just in and they know that they probably so it's really out of the, you know, the two of you in terms of who's going to get it. So, by by trying to get back into control of that discussion and having some transparency around that would be really good advice for anyone who finds themselves as first-time home buyers in that in that location. And that's where a good buyer agent is worth every dollar that you pay them because can you imagine a first home buyer being able to have that conversation the way that you just had it there. No, [laughter] it's it's not possible. And it's again it's a it's a bloody tough situation like hitting your first golf versus hitting a 10,000 golf ball. Exactly. You sort of know what you're doing a little bit but you got to have the trial and error. And that's the the reality is most experienced buyers agents have, you know, been been through their rodeos and [laughter] through the ringer. Yeah. as well and and had had the losses and the knocks to reflect upon whereas you just get your own experience in doing that and I mean you you had had a long amount of experience doing it but it's still just your experience. Um I have a I have an unusual question for you. My general approach as a broker would never be described as pushy. I'm I would never say to someone um you know get in there we've got to make this off an hour or anything like that. But given that it went on for so long for you, do you wish I had been a bit more pushy with you? Yes. Okay. Interesting. Yeah. Yeah. Um I needed that I needed that push. Um the permission, do you think? Or the motivation? Maybe the permission. It's interesting. Yeah. Yeah. Because what I loved about every time we would get together and chat is that you were always in a better situation. I always knew you were going to be fine. Sometimes when you get someone a home loan, you're like, gosh, we're pushing right to the edge of their capacity. I know this is going to be a struggle for them. I knew that whatever you ended up with would not be a struggle for you. So, yeah, that's that's interesting feedback. Yeah. Can I give you feedback on what just happened there as well? you had trust but you know because the relationship had evolved and I think it's really important to understand because you know you given us a couple of examples earlier around um the broker that you didn't choose they at one point in that process they broke trust with you like they did something that you didn't expect or something you didn't ask for and so you're a trusting person so after you know you didn't get that push that hard cell you've been able to, you know, build up some confidence that Yeah. that and you said it before Katie had your back. Yeah. So now that's people don't know that until they learn about actions and behaviors in terms of what you've done there. So I think that's really powerful in terms of and that is potentially going to be really good for you as you continue to keep looking at risk aversion because in most cases a lot of people who have risk adversion it's a knowledge gap. So so if you can fill that gap with knowledge or someone can step in and fill that gap with knowledge all of a sudden you're then going to take you know a step forward as part of that particular story. Now, nine times out of 10 that works really well, but sometimes um you can take the trust and confidence of another um and it doesn't quite work out. And in your case with your buyers agent relationship um things didn't go as well as you had hoped. So, can we unpack that a little bit in terms of what sort of the experience was like with the buyers agent and you know what you end up finishing up with and and if you had your time over again because I think this is really helpful for anyone who's thinking about using a buyer agent for owner occupy. We know that there's heaps of buyers agents out there now doing investments and you know some of them are really salesy in their approach but certainly an owner occupier experience is a is an emotional purchase and it's got to fit a certain brief. So yeah, it's a big investment. It is like it's one of probably the biggest cost you'll ever pay for a service in your life. So yeah, let's unpack this. Yeah, sure. So um my buyer's agent um uh I went off um my housemate at the time um engaged this buyer's agent. I did too. Um they I guess I had a um meeting with them first just to talk about um my brief, what I want, what I don't want. Um they have their own way of working. Um which I found um a little bit overwhelming. Um I understand that they're there to work for me. Um, and I I think just some of the um, communications that I had where I was clear about certain things, they just weren't followed through on the other side. Um, so I was a little bit disappointed just in terms of um, when I said, you know, look, I um, I'm not contactable during this um, period of time. And then I kept getting phone call after phone, you know, until I would answer my phone. Um, and it was just one of those things where I found it was um, it was just uh, not disrespectful, but um, I was paying for their service, but I just, you know, I I had some boundaries and they just they were overstepped. Yeah, I know it was in for my best interests, but the level of intensity it Yeah, it was a bit much after that slow and steady pro approach. Tell me with the um asset selections that they were giving you, was it like that sounds like operational and and you know in terms of this is what we said we were going to do but they weren't listening to that but did the assets that they were presenting to you um meet the brief or were there issues with the brief? I was um exploring my own options um so their service was merely to um negotiate and and do that. um I wanted to have my own um building inspector and and things like that, but they insisted that they use theirs. Um so again, I wasn't 100% happy with that. And what I should have I didn't do that part of due diligence when I signed up. So I didn't know that it would I couldn't use my own until after the fact. So naughty me. Not naughty you. First time using a buyer's agent. you I mean it's like any new process in life we either win or we learn don't we this is a lifechanging ex you know property is not cheap and context what what year are we talking here we probably haven't addressed that this was during co so 2020 yeah end of 2020 [laughter] yeah just to make it a little bit more complicated yeah it was quite complicated and inspections were one-on-one and did you meet your buyer's agent face to face during that time Uh only at the pre-settlement inspection. Yes, that was the only time we met. And that may have been because it was I can't remember. Yeah, a chaotic time because that's circling back to how we got together and obviously being in different states and only meeting today face to face for the first time and you worked with a buyer agent pretty much unseen until that point of view. How did you find it making a bond with someone you know in both capacities without meeting them face to face because it's so common now but it was certainly less common at that time. Yeah. Um I wouldn't say that I had a bond with my buyers agent. Um it was purely transactional. Just me. Okay. Yeah, just you. [laughter] It was just you. [gasps] So can I pivot back um to talk about money? I mean obviously this is all at the end of the day a big investment and risk aversion around that. Do do you find um in other areas of your life you have the same sort of level of risk aversion or do you have any spontaneity in other areas of what you um what you engage in? No, I I would say I'm pretty structured, risk adverse through it. Very cautious. Cautious. You're a planner? Yeah, I am a planner. Yeah. Did you Where'd you learn that from, do you think? Um, probably again upbringing. I think it was just those environment. Yeah. Look, um, dad was dad is very, um, careful, cautious. Okay. Um, and I think I get a lot of that from him. Yeah. um investors are they or no? Is it sort of pay the pay paid the family home off and and sort of very conservative retired conservative? Yes. Yeah. They did have an investment property. I remember the the house I grew up in. They turned that into an investment in the '90s. Okay. Yeah. We spoke about that today, didn't we? About that experience cuz we both watched our parents have you had your investment property and I watched my dad with his portfolio. It it adds an interesting element to your childhood to watch your parents doing that. Were they going and collecting the rent themselves? Do you remember? No. So we were interstate. So um we we let um moved into state and um that was the family home turned into investment property. So they had the agent managing all that for them. The classic unintentional investor. That's um but and but you said they had so it sounds like they've sold it. Yes. Um, do you know what motivated the sale of the property? Retirements. Okay. So, it assisted with their nest egg. Correct. And so, they cashed out and it's been part of that. Yeah. So, here we are, 2020. We've bought our first property. Um, and we've checked in and done annual reviews and it's [laughter] all going well. You were always so good at doing the annual reviews. Sometimes you have to really push clients. You were like, I'd send an email out and you'd be in my diary straight away. [laughter] planner and and obviously building up the offset. So, what's the what's the next big goal? What's the next big property goal? I love it how you look to me like, well, we've been discussing this. [laughter] Uh, no, the ne the next goal is I need I need to figure out where I would like to live next. Um, where I live at the moment is very convenient for work. Um, not much travel time. what I can afford um on my own. I probably need to look outside um out into the suburbs further. See, we haven't even mentioned that. I think part of the beauty of your story as well is that you did this all as a single female out there at a time when affordability got so so hard for solo people to purchase a property. And I love that you always, you know, were just so steadfast. I'm doing this. This is my dream and my journey. So, because what what did we buy? What was the um attributes? Two-bedroom, two bedroom, bathroom, car. Got your small block. How many in the block? Seven. Seven. Okay. And so in terms of the discussions that that are going to process through your mind over the course of the coming months, um upgrade locally uh into a villa, townhouse type thing, uh you know, sort of your own maybe courtyard or something or are we thinking push wider out and and having a bit more space? What's the Yeah, I think uh affordability in in my area um I I probably need to to push out further to have a little bit of space. Yeah. And then there's all those exciting thoughts about what you do with the current one, you know, do you sell? Do we keep it as an I like the way I say we, it's still we. [laughter] Um do we keep it as an investment? Do we look at, you know, you moving into something else and buying another investment property? You know, there's the beautiful thing about you being cautious is that you've set yourself up to have so many different options and then it's just about figuring out the right one for you. Yeah. Which I'll call you and pressure you into in no time. [laughter] Now that that trust is built up, what are we doing [laughter] first squared? What does that look like? Hey, um I'm going to give the microphone over to you now. So if you can either answer this in terms of what are the messages that you would have told yourself um you know your 2020 something self in terms of that would be different and and how is that going to help the community in terms of if someone's in your shoes now and they're thinking about buying their first home. What are some of the messages you'd like to uh to leave? So I think that um don't get caught up in the the glossiness of places. Um, yeah, sure, some of the places you go into can look great and that, but it's you're buying more than just the walls you live between. You're buying a community, buying a community, you know, you're buying into neighborhoods. Um, and one of those things that um co um didn't allow me to do this, but I would have gone and knocked on neighbors doors and and got some insight into the immediate area. Um, I've made some fantastic friendships um by purchasing my property. You know, probably lifelong friendships um and people that I would never have crossed paths with. So, as it's not just the property you're buying, um but I it took me a while to figure out that you can change things as well. You don't have to buy the the nicest um renovated place. you you can do all those things and make those changes yourself. So, um hindsight's a wonderful thing. [laughter] Um but I could have I could have probably bought something that was a little bit bit less shiny and flashy and spent, you know, the the money I would have saved um to spruce it up. Yeah, I think that's sage advice. Yeah, it is. And
