Got a question for the trio?
This ep is all about FOBBABO, an acronym Cate made up years ago. It stands for “Fear of Buying Before a Better Option.”
She coined this phrase a while back when buyers started having second thoughts after an ideal property came along.
This episode is dedicated to the trick buyers often play on themselves… some of the reasons why, things that amplify FOBBABO, why it can be dangerous, and ways to tackle it when it happens to you.
In this thrilling episode, Dave takes on the role of the host as he embarks on a captivating exploration with Mike and Cate, delving into various psychological challenges that buyers encounter. They discuss a range of issues, starting from the well-known FOMO (Fear of Missing Out) to ‘the winner’s curse’, a topic previously covered by Dave, Cate, and Pete in episode 94.
Dave prompts Cate to share insights into how FOBBABO typically manifests itself and becomes evident to a buyer’s agent. Cate sheds light on both the advantages and disadvantages of FOBBABO, revealing the market cycles in which it tends to strike and explaining why the media can be unhelpful to those grappling with this fear.
Furthermore, Dave urges Cate to explore the painful lessons that FOBBABO can impart, leading the trio to discuss the distinctions between the most recent property downturn and previous ones. Dave shares his perspectives on the impact of inflationary pressures, rising interest rates, and, notably, the reduced borrowing capacity resulting from rate hikes. This time around, FOBBABO poses even greater risks for certain buyers. Tune in to uncover more!
The trio also engages in a discussion about strategies that buyers can employ to mitigate the negative effects of FOBBABO. Cate introduces her innovative ‘reverse search engine’ exercise, which not only provides perspective for buyers feeling threatened by FOBBABO but also empowers them to conduct a thorough feasibility study. This study highlights not only the probable types of eligible properties but also their frequency of sale—a crucial aspect for anyone concerned about navigating a dynamic market.
The trio share 7 tips to ward off the chances of FOBBABO biting
- Get a clear understanding of their borrowing capacity and the impact of rate rises (they can get a sense of the timeline they may need to work to)
- Make a clear list of essential criteria for your home/investment
- Conduct a reverse search engine exercise to determine how ‘frequently’ your ideal property comes up for sale in your given areas. Cate – can you tell our listeners how this is done?
- Watch the auction results and keep an eye on the segment of the market you are keen on
- Choose commentators or economists to follow and don’t listen to media or white noise
- Don’t tell all and sundry you are buying. There will always be that nosy friend or annoying aunty at the bbq who has an opinion on how you should try to time the market
- Familiarise yourself with market downturns and understand how long they last, how strong they dip, and what the signs of recovery are
Mike Mortlock’s gold nugget is all about buyers making sure they have their brief nailed down. The reverse search engine exercise caught Mike’s attention and he encourages our listeners to utilise this tool when it comes time to circle in on their purchase plans.
Cate Bakos’s gold nugget relates to the importance of taking action. Buyers have to be informed to be prepared to pull the trigger…. but once they have made the decision to buy, they just have to go for it!