Buying your first home is an exciting and significant milestone, but it takes a lot of time, planning and preparation. With prices at record highs and intense competition from buyers, you need to be well-prepared and be mindful of the potential pitfalls so you can choose a place that will work for you now and in the future.
Being aware of the following mistakes can help you make more informed decisions, avoid costly errors and get into your new home sooner.
7 biggest first home buyer errors to avoid
Not setting a realistic budget or having pre-approval
One of the first steps in the home-buying process is getting pre- approval so you know how much you can afford.
When you work with a lender or mortgage broker to figure out your budget, take into account the amount you can borrow and the other costs associated with buying, such as stamp duty, legal fees, building inspections and the cost of moving.
Not knowing exactly how much you can spend will waste your time because you’ll be looking at places outside of your price range. If you don’t have pre-approval, you may also find yourself missing out on places you like because you’re not ready to make an offer.
Overlooking government grants and incentives
Most state governments offer grants, incentives and schemes to assist first-time home buyers. Some buyers overlook these opportunities and miss out on financial assistance that could significantly reduce the overall cost of buying a home.
Take the time to research and understand the grants and incentives you are eligible for, as they can make a substantial difference in your home-buying journey. Your mortgage broker can be a good source of information in this regard.
Not conducting thorough property inspections
It’s easy to get caught up in the excitement of finding a home that appears perfect on the surface, but hidden issues can lead to costly repairs in the future. A common mistake first-time buyers make is failing to conduct a thorough property inspection before purchasing.
A professional building inspection will outline potential structural problems, pest infestations, or other issues that may not be immediately apparent. Getting a report from a qualified property inspector can save you thousands of dollars, not to mention a lot of headaches after you’ve moved in.
Not considering future resale value
While your primary focus may be finding a home that suits your current needs and budget, it’s also essential to consider the property’s future resale value, especially if you plan to use this purchase to leap-frog to a bigger or different place in the future.
First-time buyers sometimes make the mistake of purchasing homes that may be difficult to sell in the future due to location, size or other factors. Even if you don’t plan to sell in less than five years, thinking about resale value is a smart financial strategy as it can increase your equity. Look for properties in desirable locations with good growth potential to ensure your investment increases in value over time.
Letting emotions drive your decision
Buying a home is often an emotional process, especially for first- time buyers. However, letting emotions drive your decision can lead to choices you regret.
Approach the home-buying process with a level head and focus on practical considerations, such as the home’s condition, location and price. Try to separate your emotions from your decision-making process and choose with your head rather than your heart.
Not considering long-term needs
Many first-time buyers make the mistake of focusing solely on their current needs, without considering how their circumstances may change in the future. It’s important to think long-term when purchasing your first home.
Will the property accommodate your future lifestyle? Are there good schools nearby if you plan to have children? Is there room to expand or renovate? Considering your long-term needs will help you choose a home that suits you both now and in the years to come.
Failing to seek professional advice
Navigating the property market for the first time can be daunting, and failing to seek professional advice is a common mistake. A real estate agent, mortgage broker and conveyancer/solicitor will apply their knowledge to guide you to a successful outcome.
In many cases, your real estate agent will identify the right place for someone before they do. This is because they have many years of experience as a property ‘matchmaker’.
Real estate agents based in the area where you want to buy will be one of your best sources of information. Remember, they are here to help, so take the time to have some conversations and let
them know exactly what you’re looking for.
Ready to start your home-buying journey? Contact your local Real Estate Professional today at teresa@teresabereger.com.au.
