Whether they’re common mistakes that you’ve heard a hundred times before from that one uncle, or things that you never thought to consider, Intuitive Finance has come up with a list of what to look for when buying your first home. House-hunting mistakes are bound to happen from time to time, so your best bet is to arm yourself with the knowledge of not only how to avoid them, but also how to make the most of any first-time home buyer benefits that could be available to you.
Mistake #1 - Borrowing/buying over your budget
It might seem like one of the more obvious common mistakes, but borrowing or buying over budget is something we see happen all the time among first home buyers. Whether it’s because a young couple finds what they think is their dream house, and they don’t want to risk losing a property they’ve fall in love with, or someone who’s been looking for a property for longer than they were anticipating is eager to just put something to their name, it happens more frequently than you might think. Your best bet to avoid something like this happening to yourself is to do your market research. Get really clear on what you’re looking for and the ballpark range you should expect for the type of property you have your eye on. Having clear expectations and a realistic understanding of the market is your best armour.
Mistake #2 - Not doing your proper due diligence on the property
While you may think it goes without saying, doing your due diligence on a property before making any commitments can save you from years of trouble, regret and debt later on down the track. If you’re not sure what to look for, go by the book and conduct thorough building and pest inspections to ensure the property is sound and won’t run into terminal or additional maintenance issues after your purchase. Think about the location of your property in relation to the immediate neighbourhood – are you buying near transport, or facilities? A property alongside a busy road can impact resale value, and the additional noise it generates should be factored in. Don’t forget to check easements, boundaries and building overlays as well, as these can impact potential improvements to the property in future.
Mistake #3 - Listening to bad advice from the wrong people
When it comes to house-hunting mistakes and the poor decisions surrounding them, a lot of the time we can pinpoint them to one recurring culprit – taking advice from the wrong people. We all have well-meaning friends and families, often with their own very valid anecdotes surrounding their own property purchases, but remember to take any advice from non-professional parties with a grain of salt. It’s important to take into account the location, property type, year and the economy at the time among other variables when listening to anecdotal advice – at the end of the day, we always recommend speaking directly to professional brokers like the experts at Intuitive Finance for the best advice for your situation.
Mistake #4 - Letting FOMO or emotions overrule decision making
Need we say more on this one? We’ve all experienced FOMO and post-FOMO (POFOMO?) regret before – whether it’s going out on a night we shouldn’t and regretting it the next morning, or buying a property that’s not quite right for you and your needs, FOMO can drive us to make decisions in the heat of the moment that we ultimately wouldn’t if we were thinking a little straighter. There’s also the all-too-familiar case of falling in love with a property and believing it’s “the one”, which if you make it evident to the real estate agent, can give them ammunition to push for a higher sale price from you than you might have been able to obtain otherwise.
Mistake #5 - Utilising the wrong loan structure
This mistake is a particularly important one to be mindful of, as it can affect the next 30 years of your repayment obligations. There is no one ideal loan structure, no one-size-fits-all approach – between fixed and variable rates, offset accounts and more, it may feel confusing but it’s worth wrapping your head around. As a first home buyer, you need to be aware of how the correct loan structure can not only save you money in the long run, but also affect your quality of life in the meantime and how you’re able to juggle mortgage repayments with living a quality of life that you’re comfortable with. There’s also the common mistake of making minimum loan repayments, rather than structuring to make extra payments using an offset account – treading water and paying just the principle will have you spending more money in the long run, and have you going nowhere fast.
Want to ensure you’re getting the best advice for your situation? Our experts have years of experience working with first home buyers to help them navigate the property market with ease. Contact us today for an obligation free consultation.
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