Buying your first home is a big step and if you haven’t done it before, it’s natural that you won’t have all the necessary experience to avoid the traps. Here are the most common mistakes made and some advice on how you can transverse them on your way to own your first set of bricks and mortar.
1. You start looking before you have the all-clear.
Don’t consider properties until you have already made contact with your bank. There’s no point in looking for homes if you aren’t sure what type of loan you can service.
2. You haven’t done your research.
When looking for potential loan lenders, don’t get side-tracked looking at deals and advertisements that seem too good to be true. It often means they are! Mortgage rates may look better because other privileges have been omitted from the contract. Make sure you are choosing one – and reading all the fine print.
3. You are confused by different mortgage options.
If you don’t understand something, pick up the phone and ask. Don’t be afraid of looking inexperienced, you’ll only regret it later when you realise you’ve signed onto something under false assumptions.
4. You shy away from asking questions.
Don’t be afraid to exert a decent level of authority in the buying experience. Don’t confuse agents, lenders and conveyancers and doing you a favour – after all, you are paying them a pretty penny for their time. Make sure you keep on top of everything you are getting them to do for you, and ask them questions as they come to you, not months after the sale.
5. You borrow too much money.
Not being aware of financial capabilities is another landmine to avoid when buying for the first time. Stable employment is the first factor to consider. Try to avoid looking for new work when you’re also looking forhouse. It will make you more attractive to lenders to know you have stable employment.
6. You think a pre-purchase inspection is a waste of money because ‘Everything looks fine.’
Cakes might look beautiful on the outside but be dry and tasteless to eat. Don’t make this rookie error with your future home. Make sure you spend the money and have an expert examine the house for its structural integrity and any creepy crawlies.
7. You believe the price tag is final.
You’re naïve to think the price you bid is the true price of your dream home. For some people, the actual price from the point of sale can increase by 11% by the time you’ve unlocked the door and moved in. Some of these costs include stamp duty, loan establishment fees, home loan servicing costs, valuation of property, pest inspection, building inspection, connection of internet and telephone and removalist costs.
8. You don’t read the fine print.
This doesn’t need to be explained in great detail especially if you are the type of person who isn’t bothering to read the text underneath the headings in this article. The house is full of termites and the five previous owners died under mysterious circumstances, but hey, you wouldn’t know that would you?
9. You are getting too emotional about the house.
Buying a house is a decision which will be both financially stressful and emotionally strenuous. Try to separate your emotional self from your rational decision making or you could make bad choices.
10. You sleep in on weekends and don't attend enough ‘open for inspection’ days.
Buying a house gets easier through experience but just because it’s your first time, doesn’t mean you have to go into it blind. The more houses you inspect, the better you will get at finding the diamond in the rough.