Top 5 mistakes when buying your first home
Regardless of what you are buying - whether it's a new apartment or a house - ensuring you find the most suitable home can be a challenging and frustrating task, particularly when you are starting out. Whilst it may be incredibly exciting, there a number of common mistakes that many first home buyers make. It is crucial that you make sure you are as prepared as possible and don’t fall into some of the most common pitfalls below.
1. Not Getting Pre-Approval
Know your financial status. Before you begin looking at properties, it is important to know how much financial lenders are willing to lend to you. Do not waste your time, money and attention looking at places that you can't afford so avoid the disappointment of finding the perfect home and then learning you can’t have it.
2. Borrowing too much
Many first-home buyers make a critical mistake of borrowing their financial limit. Whilst this is possible, stretching your loan to this extent can severely restrict your future financial moves such as making improvements to your property when you move or significantly restrict your spending limit once you have moved in. For extreme cases, if you have unforeseen financial problems, it could result in having to sell your house before you have significant equity in it resulting in a higher financial burden to deal with.
3. Not being proactive
Whilst it is nice knowing that you can ask for your local real estate agencies for their expertise, too many first home buyers rely solely on this. As a first home buyer, it's important to take a proactive approach and your own independent research to be as informed as possible. Taking steps such as reviewing auction results in your local paper and online, narrowing down your research to specific areas you want to buy in and understanding the current and historical financial history for prices in that area are all things buyers should be doing. It is important to do so as it will be help you to not overspend on houses either through effective counter offers or over bidding for them at auctions.
4. Not getting a pre-purchase inspection report
Older homes that need minor or cosmetic repairs and renovations, can sometimes be some of the best real estate deals. Houses that need a significant amount of work can be some of the worst home buyers deals for new homeowners and unfortunately, many of those major repair jobs are usually hidden from view. The message here is to not fall into the trap of trying to save money by not purchasing a pre-purchase inspection report. Failing to do so and dealing with any potential major house flaws can cause many headaches and set you back thousands of dollars down the road.
5. Underestimating additional costs
Buying a new home alone is expensive. But in a reality, the costs don’t stop there. When you buy a new home, there a number of other costs that you need to be able to cover that include:
When planning and budgeting for your house, be sure to take these additional costs into account so you do not have any unexpected financial burdens that you may not be properly prepared for.
As with every major decision in your life, be sure to be prepared and informed about buying your first house to ensure you are in a comfortable position financially with a sound piece of mind.
If you are looking for more information or looking to buy your first home, get in touch with the team at First Home Buyers Direct.
Posted by First Home Buyers Direct on 22 February 2017 | 0 comments
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