Buying a house is not easy, especially for first time home buyers. There are a lot of factors to consider such as the location, best loan package, and budget. You also want to make sure that you get a home that’s right for your lifestyle and that you’ll enjoy living in, which can be hard when you’re new to the process.
If you’re looking for your first home, you might be surprised at how much work and research actually goes into securing a new home, and also how many mistakes people make in the process.
Check out the rest of this article to learn more about the most common mistakes homebuyers make and how you can avoid them
1. Not Knowing How Much You Can Afford
First-time buyers often expect their first purchase to be their dream home. However, your dream home might be beyond your budget right now. In order to work out how much you can afford to pay for a house, come up with a thorough budget of all your income and expenses. The money left over in your budget is what you can use on a home.
You can also use online tools such as a first home loan calculator to see how much you can borrow. Besides the loan and deposit, take note of additional costs such as stamp duty, council rates, legal fees, and future maintenance costs.
2. Doing Too Little Research
Knowledge is power, especially for first time home buyers. Research as much as you can on topics such as the property market in your area, the process of buying a house, the history of the property, and the additional costs of homeownership.
By knowing as much as possible about your local property market, you can differentiate the good deals from the bad and negotiate better. You can also consult with builders or a mortgage broker to find out the best mortgage rates and what other government incentives you might be eligible for.
3. Not Getting Pre-Approved
If you sign a contract without being pre-approved for a home loan, you might be disappointed to find out that you’re not eligible for a loan, or you might be offered a loan with less than satisfactory terms. By getting pre-approved before you go house hunting, you can save a lot of time and energy.
If through your pre-approval check you find out that you aren’t eligible for a home loan, at least you know where you stand financially and can take the necessary steps.
4. Skipping The Pre-Purchase Property Inspection
One of the regrets first home buyers have is buying a house only to find out that it’s riddled with issues that require a lot of money to fix. You can avoid this by conducting a pre-inspection on the house you’re interested in.
You can also leverage any issues found during the inspection to negotiate a better price on the house. Be sure to hire a professional building inspector to examine the house (including looking for pests).
5. Being Shortsighted
A particular house or area might look like a good purchase now, but that might not be the case a few years down the road. Likewise, a property in a boring neighbourhood might see massive development in the future and turn into a good investment.
Make sure to research a property and its neighbourhood before you buy it so you know the future development planned for the area such as roads and schools.
6. Being Too Emotional
It’s perfectly normal to be excited when buying your first home. However, you have to be rational to avoid purchasing the wrong home or getting a bad deal.
You might take a little longer to secure your home, but at least you’ll know you’re making the right choice. While it’s important to choose a home that you’ll love, you also have to think with your head and not just your heart.
7. Unwilling to Compromise
It’s tough to find the perfect house; unless you build your own home, it’s very unlikely to find one that ticks every single box. You’ll need to compromise with what you want in a property especially if you have a limited budget.
While you may not be able to purchase your dream home as a first-time buyer, you can definitely find one that’s comfortable and that you love living in.