Buying a first home is exciting and, for most people, buying a home will be one of the biggest investment they will ever make. There are a few tricks to buying property. Luckily, we are giving you our best tips!
Not getting a pre-approval
First home buyers will often buy with too much emotion and overestimate what they can afford. A pre-approval will help you keep yourself level-headed. A pre-approval is where you provide your credit history to a broker or a lender, who will verify your income and give you clear guidelines on what you can afford to borrow. Getting a pre-approval before you start looking for a property to buy will help you narrow your search and look at properties you can actually afford long-term. You don’t want to find the home of your dreams then realise you can’t borrow enough to buy it.
Borrowing too much money
It’s not always a good thing if you borrow the absolute maximum amount the bank will allow you to. It will mean that your finances are stretched to the absolute limit, which might affect your lifestyle and your ability to enjoy your new home. Another risk is if you run into financial trouble, for example, if you lose your job and are unemployed for a while, you won’t be able to afford your loan repayments which could mean selling your home. It’s important not to spread yourself too thin – make sure you can save enough to have a bit of a buffer.
Being REactive, not PROactive
You’re probably tired of hearing us say this, but do your research! It’s so important to put some time and effort into researching the local market to find suburbs that are more affordable, comparable sale prices, etc. Remember that when you talk to a real estate agent who is selling the home, their duty is to act in the best interests of their client, not you. Be sure to know your facts so you know whether the property is advertised at a fair price and, if it isn’t, how to make a counter-offer.
Letting your emotions overcome you
Buying your first home can be (and probably will be) emotional. Try not to get too swept up by your emotions, though. You need to be thinking logically. Consider what the potential returns/capital gains the property might have when you’re upgrading or moving elsewhere.
Ignoring the additional costs
Believe it or not, when you buy a home the price of the property is not all you’re paying for. There are a number of other things to factor in, including insurance, moving costs, inspection reports, stamp duty, council rates and transfer fees. Being aware of these costs from the start can help you budget and stay on top of your finances.
Forgetting about the building and pest reports
Sometimes older homes will be in need of some maintenance and repairs. There’s nothing wrong with this, as buying a home in need of repair means you should get some money knocked off the purchase price. However, major repair jobs can often be sneakily hidden! It’s worth investing in getting a professional to inspect the property because it could save you thousands later on.
Read the contract!
This isn’t specific to buying property, but it definitely applies to first home buyers! Ensure you read the entire sales contract to ensure there are no terms hiding in there that may come back to bite you later!
Contact us to get a copy of our First Home Buyers eBook.
If you have any questions, call Shoheel Khan on 0418 110 870 or book an appointment with one of our specialists today!