First-time mistakes to avoid
From house hunting to arranging finance, there’s a lot to learn the first time you buy a property. Each step presents challenges and many first-timers fall into the same traps. Here are nine common mistakes and how to avoid them.
- Over-stretching your budget – Once you’ve crunched the numbers on how much you can afford, stick to that sum. Don’t over-spend, even on a property you love.
- Rushing in – If you’ve been looking for a while, it can be tempting to compromise on important details because you’re frustrated with searching. But beware of hasty decisions you may regret later. Review your checklist of features and reassess what you really want.
- Getting too picky – At the other end of the spectrum, you should be prepared to make some sacrifices, especially if other features you desire can be added later.
- Failing to research – Get to know how much homes in your search area cost but also learn about future changes that may affect values, such as proposed land rezoning or roads that may be built nearby. Factor this information into your decisions.
- Not getting inspection reports – Structural reports and pest inspection can reveal otherwise hidden problems. Knowing about these upfront allows you to budget accordingly and maybe negotiate on price.
- Forgetting extra costs – In addition to the property price, you may have other costs such as the cost of title searches, solicitor fees, removalists and potentially upfront repairs. Ensure you’ve saved enough to cover those and other charges.
- Failing to arrange finance – You may think you know how much you can borrow, but does the bank agree? Speak to your lender about seeking pre-approval for a loan early in your house hunting process. This provides comfort that you’ll have the money when you need it.
- Job hopping – Recent or frequent job changes may make lenders reluctant to extend finance. If possible, this is something to keep in mind.
- Not reading the fine print – Sale and mortgage contracts are long and complicated but their contents are important. Read them in detail and have a lawyer explain what they mean.
Quick tip: To avoid mistakes, plan ahead, do your research and stay focused on your goal.
TO FIND OUT HOW RAMS CAN HELP EASE YOU THROUGH THE PROCESS, GET IN TOUCH WITH YOUR LOCAL RAMS HOME LOAN EXPERT OR DROP IN FOR YOUR FREE FIRST HOME BUYERS’ GUIDE.
For more great property advice and tips on buying your first home from RAMS subscribe to The Great Australian Dream property series.
For your free Property Observer eBook from RAMS, 12 tips for first-time buyers, covering everything you need to know when it comes to purchasing property, click here.
Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.