7 Common Mistakes Home Buyers Make (& How to Avoid Them)
Written by Miriam Sandkuhler author of Property Prosperity - 7 Steps to Investing like an Expert
Eager to buy your first home? Not so fast.
Home buying may appear straightforward however it can be quite a challenge. It involves large sums of money, numerous legal processes and conflicting advice is available. It's easy to get lost in all the confusion and chaos. Furthermore, some home buyers tend to repeat the same costly mistakes over and over again.
With this guide, you will learn how to avoid common mistakes that other home buyers have made. Knowing the possible pitfalls of home buying in the Melbourne real estate market and understanding how you can make informed decisions before purchasing your first house is vital.
Mistake #1 Not thinking ahead
Plan ahead and think thoroughly about you and your family's current and future needs as these are both critical to home buying success. Do your research based on what property your budget will allow including the style, type and location. This will help minimise buying mistakes and decrease the risk of spending your hard-earned savings by purchasing the wrong property.
How can you avoid this mistake?
Seek independent advice and representation from a trusted industry professional such as licenced buyer’s agent or buyer’s advocate. This type of property agency will help you get the best property at the most affordable price, with terms and conditions in your favour. They will provide you with unbiased advice, guidance and protection from being misled or overpaying for your property.
Mistake #2 Trusting the selling agent
Are you familiar with the person you are liaising with? Think twice before you put your trust in your chosen agent. Make sure that they will put their knowledge to good use – by keeping the price down and ensuring everything about the property is AS ADVERTISED. They should be fair, independent and stick with you throughout the entire process.
How can you avoid this mistake?
Set a realistic plan that will enable you to buy your dream home. Secondly, look for a buyer’s agent who can help you develop your home buying plan. This is the first step in the buying process which can save you time and money. The agent should provide clarity, security and give an assurance that your desired property will suit your overall budget and lifestyle.
Mistake #3 Not having a buying plan
Buying plans? Check. The perfect strategy? Done. It is essential that you have these two in place. When planning, check the following off your list – borrowing capacity, purchasing timeframes and lifestyle objectives. But keep in mind that you also need to be flexible for changes and that you have entry, hold and exit strategies.
How can you avoid this mistake?
Know which experts to approach so you can reduce the risk of wasting your budget, time and the high levels of stress. Work alongside experts who know how to find, assess, and negotiate your dream home – a space that suits your lifestyle, budget and is located in a favourable area.
Mistake #4 Not engaging a team of experts
Seek the help of experts as neglecting expert help could cost you thousands of dollars. Here are the people you need.
- Licenced Buyer's Agent. Simply called the 'bidders'—they’ll get you the best price in the market.
- Mortgage Brokers. Want to get best the loan complete with affordable rates and stunning features? A mortgage broker is the person to call.
- Conveyancers/Solicitors. They advise you on contract's legal terms and clauses. Plus they scrutinise the contract of sale to minimise the risk associated with buying your home.
- Building and Pest Inspectors. Help you reduce risk by evaluating what structural or pest problems exist at the property.
- Insurance Brokers. They assist you in getting the right policy to meet your lender's requirements and help you settle the property in time.
How can you avoid this mistake?
Find a trusted company who will do all the research for you. This will help you eliminate stress and confusion and the overwhelming amount of conflicting information in the market place.
Mistake #5 Not doing adequate research
Researching and assessing opportunities are just as important as working with a team of experts. When buying a home, you should consider if the location is near public transport, different establishments, school, hospitals, and recreational areas. Speak to locals to understand the people and the environment. Lastly, consider if the property features meet your needs.
How can you avoid this mistake?
Partner with a company who are experts at negotiating. Your chosen company should be adept at using strategies to give you a fantastic result, with skill sets that ensure that you don't overpay for your home.
Mistake #6 Not understanding negotiation
In real estate, awareness and familiarity are essential. The rules on pricing property are quite complicated and differ from state to state. Some states go for the auction method of sale, others just simply oppose. As such, it is essential that you are familiar with pricing, auction, and private treaty sale guidelines in your state so you are better informed on matters such as under quoting.
How can you avoid this mistake?
The entire process of buying a property is quite complex but with a trusted agency, you are better informed to achieve the desired results. Your chosen agency will protect your anonymity and provide assistance throughout every step of the buying process. They will help you in reducing the risk, stress and frustration when purchasing a property.
Mistake #7 Becoming emotional
As a home buyer, you have to be aware that competition is tough in the real estate industry. Don't let emotions get in the way as emotional buying can lead to plenty of mistakes and can greatly influence your decision making. Some agents use tricky methods to get information from buyers so it's best to keep your emotions in check especially when dealing with a real estate agent.
How can you avoid this mistake?
Employ a specialist property advisory firm like Property Mavens to do research, sourcing and negotiating to secure the home of your dreams. They have built a solid relationship with clients over the years and will leave you feeling secure, empowered and financially in control.
Download my full 24 page ebook for more details and other free investment property resources.
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