If you’re thinking about buying a home, whether it’s your first home or you’re upgrading or right-sizing, today’s show is for you as I discuss 13 common mistakes homebuyers make with Leanne Spring, Director of Metropole’s home buying and selling team.
And even if you’re not planning to buy a home, if you’re interested in property, I’m sure you’ll get some tips from my discussion today because property investors often make the same mistakes homebuyers make.
Mistakes Homebuyers Make
Buying your next home can be a daunting task, especially if it’s your first home.
It’s exciting but full of complexities.
While it’s likely to be the largest financial transaction you will ever make, we’ve found that many home buyers are poorly prepared to ensure they make a good purchase decision.
To help guide you, Leanne and I discuss 13 Common Mistakes made by Home Buyers – ones that you should avoid.
- Not doing proper research and preparation
Understand your family's finances and needs.
Get to know the neighbourhood. You’re not just buying a house; you're also buying a location.
It’s important to find out about the quality of schools, the crime level, transport, and possibly upcoming zoning issues.
- Choosing the wrong mortgage
To put you in the best-negotiating position, it’s critical to have your loan pre-approved (not just pre-qualified) before going house hunting.
Find out how much house you can afford – but you can’t simply go to a bank's Internet site, use the calculators to see how much you can borrow, and assume you’ll get a loan.
- Being influenced by “The Market”
Don’t be influenced by “the market” more than by your own needs.
However, waiting for the “right time” or prices to go down is gambling with your family’s future.
- Going beyond your budget
Every homebuyer knows the feeling - you're looking for a home that fits your budget, but that much more expensive property looks that much more appealing.
However, buying a home that's way out of your price range could well derail your finances in the future.
It’s human nature for us to want a little more than we can afford, and there's always a real estate agent who’ll talk you to the next level.
- Falling in love
If you think a house is ideal, don't let the seller's agents know.
A wise home buyer knows there are lots of houses - and there's one out there that's the right house at the right price.
If you can't afford it, move on and keep looking.
- It’s not all about price
We all know you make your money in property when you buy, but that doesn’t mean you must buy cheaply.
You make your money by buying the right property, not a cheap property.
- Not having the right protection clauses inserted in the contract of sale
Don’t sign anything until you are sure your interests are protected.
While the standard contract to purchase a property will give you a “3-day cooling-off period” (this varies in different states), smart purchasers request additional clauses to protect their interests.
- Underestimating the full costs of buying a home
Many homebuyers fail to budget for the full costs associated with buying a house.
Owning can cost much more than renting with expenses like rates, insurance, and maintenance.
- The “Fed Up” Purchase
One big mistake home buyers make is buying a property in desperation.
They buy something reasonable rather than something that suits their needs because they’re sick of the emotional rollercoaster of home buying.
This is a decision you may live to regret for a long time.
- Not organizing a professional building inspection
It’s important to engage a competent and independent (not one recommended by the selling agent) professional to check your potential new home.
If you’re not sure how to interpret the report, have a chat with the building inspector and ask questions like - would you buy this property?
- Misunderstanding the real estate agent's role
Real estate agents are friendly people, and while shopping for a house, you will spend a lot of time with various agents.
However, the wise home buyer understands who's working for whom.
Unless you have engaged an exclusive buyers’ agent, then the agents are working for the sellers.
- Going solo
The sellers have an agent protecting them, looking after their interests, and advising them, but most home buyers go solo.
it’s important to have the same protection on your side that the seller has.
That’s why it’s critical to engage a professional buyers’ agent to represent your interests.
- Thinking this list is exhaustive
It's not. There are many other issues to consider.
But hopefully, this will help you avoid a few common mistakes as you contemplate buying your next home.
Links and Resources:
If you’re keen to buy your next home or investment property why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors.
Get a bundle of eBooks and reports here:- www.PodcastBonus.com.au
Some of our favourite quotes from the show:
“Interestingly, the system is stacked against them, with much of the power being on the side of the seller.” – Michael Yardney
“Price is what you pay; value’s what you get.” – Michael Yardney
“Think about it: to grow as a human being requires work, and more often than not, it requires embracing the unknown.” – Michael Yardney
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