9 mistakes first home buyers should avoid

Thinking of buying your first home? It’s an exciting time, and it is easy to get carried away. Here are 9 mistakes first home buyers often make that you should try and avoid when buying your first home.

1.   Rushing

Buying a home is an exciting thing, and the feeling of just wanting to move in as fast as possible can be overwhelming. But you don’t want to be rushed into buying a house you can’t afford or one that doesn’t suit you. Make sure you approach the process slowly, and take it one step at a time.

2.   Not knowing your credit history

Your credit history is one of the most important things lenders consider when determining whether or not to lend you money. You should purchase a credit report which gives you an overview of your credit history, to get an idea of how likely it is you will be granted a loan.

3.   Borrowing too much

First home buyers often think they should borrow as much as possible, but you never know what can happen in the future. Borrowing more than you can afford to pay back will never end well, and you should ensure you are borrowing less than you can afford.

4.   Not knowing the additional costs

Buying a property doesn’t just come with the purchase cost. There are loan fees, insurance, moving costs, and more to consider. Make sure you can afford all of these fees as well as the house you are buying before you jump into it.

5.   Becoming emotionally attached

You may have found your dream home at a reasonable price, but don’t become too attached. Someone could always offer more than you, or other things could happen that lead to the home being occupied, but not by you. Avoid becoming attached to one home in case something happens and you don’t end up buying it. It is also ideal to avoid showing how much you love a home at the home open, to allow for ease of negotiation later on. If an agent knows how much you want this home, they may take advantage of this, and try and sell you the home for more than you can afford.

6.   Not researching

Failure to research the area and the surrounding houses can lead to you paying more for a home than what it’s worth. Knowing the approximate value of the home before negotiating with the seller can potentially save you a lot of money.

7.   Buying a ‘money pit’

Some first home buyers think it is better to build a run-down, old house which they can build up into a beautiful, just-like-new one to break into the market. The trust is, unless you are an investor with a lot of money, this is not a great move. Buyers of these homes usually end up spending more money on them than they would if they had just bought a modern home in the first place.

8.   Not understanding the details

It is exciting buying a new home, but again, rushing is no way to go. Paying attention to the small details is highly important, and pays off in the end. Make sure you know what you’re getting yourself into, especially when it comes to the terms and conditions of your mortgage and repayments.

9.   Not using the first home owners grant

Every state in Australia offers some amount for first home buyers, and there is no reason for you not to use it. Make sure you meet all the criteria before applying, and use it to your advantage if you can.

This blog post is the intellectual property of Peter Taliangis of Professionals Fremantle and is being used on this site solely as a representation of my work.