Buying a home is an important decision, and even more so purchasing your first home. Here are the Top 10 mistakes to avoid when purchasing your first property.
1. Not securing pre-approval
One of the first things you should do once you decide you’re going to buy your first home is to get pre-approved for a loan. This way you will know in advance how much you can afford and what loan amount you can borrow.
2. Not being familiar with the sales process
Before you start your search, be aware of the practicalities of buying a home. For example, read up on how auctions work, the best way to go about making an offer, what to look for when buying property, and real estate agent tricks and traps.
3. Not looking at all aspects of the property
When searching for your dream first home, it’s not just about inspecting the rooms and outdoors areas, you need to take many other issues into consideration such as:
- Possibility of aircraft noise
- Local traffic levels
- Parking availability
- Nearby industrial activity
- Developments planned for the nearby area (talk to the local council authority about this)
- What the rest of the street looks like
TIP: Visit the property and surrounding area at different times of the day and observe what’s happening. The last thing you want is one of these factors affecting your quality of life once you move in.
4. Not doing your research
Failing to understand the market and exactly what properties are worth could be your downfall in securing a property at the right price. There are lots of places where you can research property prices including auction results in newspapers or on the Internet and speaking to local real estate agents.
Our free property reports are a great option and contain inside information to help you with your purchase decision.
Not sure what this all means? Speak to us to help cut through the jargon and guide you.
5. Choosing the wrong area
The suburb you move into will become a big part of your life so it’s important you make the right decision when it comes to choosing a suburb.
When compiling your list of suitable areas, consider the following:
- Are there adequate transport facilities?
- Will you have to commute far to work?
- Do you like the surrounding area and facilities it offers? Are there adequate amenities nearby for your needs?
- If you plan on starting a family, are there enough related services nearby, such as parks, childcare centres, hospitals etc?
6. Failing to get a property inspection or strata report
We’ve all heard horror stories about those who’ve purchased a new home only to find it riddled with termites.
While you might think this will never happen to you, just remember that buying a property will be one of the most expensive financial commitments you’ll ever make.
And it could prove an even more costly one if you don’t get an independent pest and building inspection done prior to purchase.
7. Not acting quickly enough
Once you see your ideal home, you may have to move quickly. Whether it’s the first property or the 100th property you see, if it feels right and it’s within your budget (and you’ve looked at all the aspects above), don’t leave it too late before making an offer. Someone might just beat you to it.
In the same vein, don’t be talked into buying any property you’re not sure about.
8. Letting your emotions get in the way
While the search to find your home will be an emotional one, it’s best not to let your emotions get in the way when it comes to transacting a purchase. This especially rings true when it comes to auctions, as under the circumstances, it’s easy to get carried away. If you feel too emotionally attached and feel you will go over your budget, consider having someone else do the bidding for you.
9. Don’t be gazumped
‘What is gazumped?’ I hear you say. Imagine you’ve made an offer, it’s been verbally accepted, and the real estate agent tells you “It’s in the bag”. Then another buyer comes along and offers more, and the real estate agent sells it to them instead. That’s gazumped! Nothing is set in stone until you and the owner sign a legally binding contract. After making an offer, ask the real estate agent to let you know if another party puts in a higher offer so you can make a counter bid if you wish.
10. Going beyond your means and budget
As a first home buyer (and this rule applies to anyone buying property), you should never go above your budget and financial means.
If you do, it may affect you and your family’s short-term and longer-term financial situation. It’s always better to play it a bit safer and think about events that could happen in the future, for example job loss or interest rate rises.