16 Common Mistakes Home Buyers Make
You may borrow too much based on your present situation. You must make allowances for changes in the future. Be careful of loans with payments which increase at a later date.
- Inclusion Costs
You may spend too much on the purchase price of a home and have insufficient money for your inclusions, improvements or furnishings. There are few things more depressing than having the home you want in the right area and being unable to afford window coverings etc. In extreme cases, the cost of the home can seriously hurt your living standards.
- Instinct Neglect
Don’t ignore your “Instincts”. No one should buy a home without having that “Feeling” that the home is right for you.
- Initial Costs
It is easy to underestimate the expense of moving into a new home. When you first move to a home, anything can go wrong. Things that have often been working fine for years will suddenly break. It is almost like the house is upset the previous owners are moving out. Just be prepared for a series of irritating break downs and maintenance work. A new hot water element can cost hundreds of dollars . Most buyers fail to anticipate these events.
- The 'Fed Up' Purchase
You may get tired of looking. You may become desperate and buy something which is ‘reasonable’ rather than something which is suitable. Don’t talk yourself into buying something you don’t like. This is a decision you can spend years regretting. Be careful to buy what feels right, no matter how long it takes . Better to stop looking for a couple of weeks than buying something out of desperation or frustration. With patience the ‘right’ home is always found.
- Over Cautious
Buy within your limits, but don’t go too far below what you can afford. You may spend several years wishing you had paid a bit extra for a better home. If you can’t find a home to suit you, consider a cheaper area. Sometimes you can buy exactly what you want in a neighbouring suburb. Is an address really that important to you?
- Buy On Price
Do not buy on price more than on emotion. The home itself is more important than the price, provided it is within your price range. Some people see the home they really want and if they can’t have a big discount they refuse to buy. This is often a big mistake which you may regret bitterly in the future.
You may be tempted to make no decision. You may look for months and years. While you waste money in rent, the prices may rise and you will be left behind. Do not be too demanding and unrealistic. Be realistic and sensible Realise that buying something is better than buying nothing. Home ownership is too important to risk a long delay.
- Helpful Friends
Do not allow your relatives or your friends to make the major decision instead of just giving you advise and opinions. Relatives and friends do not have the same emotions as you. Friends mean well, but it is unfair to pass the final decision to anyone other than the people who will live in the home. Sometimes it is best to buy a home and inform your friends once the sale is completed.
- Getting an Independent Inspection
It is essential for your financial and emotional safety that you get a paid professional to do a building inspection on your property. Spending $400-$600 now may save you thousands later. But also be aware that these professional inspectors are trained to find faults. Look at major faults. Do not let the minor faults trouble you too much. Poor guttering is much less of a concern than poor foundations! Remember that every property will not be perfect in every way.
- Losing Money with Auctions
While you can often buy at lower prices with auctions the problem is finding out the truth about the likely selling price. At auctions, thousands of home buyers lose money through legal and inspection costs. Also make Very sure you have you full bank approval to borrow the money. Remember buying at auction is unconditional on the day with often a 10% deposit payable immediately. This is why so many agents love auctions as they can know that they will have money in the bank 30ish days after an auction. Your hard earned 10% is NOT REFUNDABLE !!
- Advertised prices ranges
One of the most horrible things that can happen is you go to see the home of your dreams advertised with a price range of around 40,50,60 thousand dollars. You the buyer falls in love with a home that you don't have a hope in purchasing. This is also extremely upsetting for the home seller, as they are told that the price range is a good thing, as it gets buyers in. (but the buyers that cant afford the property) You see a home advertised $400-450,000 and naturally come in with an offer of $401,000.00 the owner is horrified because there is no way they are selling for a cent under $448,000.00. So be careful of price ranges, You might get hurt.
- Tolerating Poor Service From Agents
Before you find the right home, find the right agent – one who will listen to you and one who is prepared to help you find the right home. Sure, agents are paid by sellers, but this is no excuse foe the widespread apathy, deceit and rudeness shown towards some buyers. All agents are not the same. Try to find one who will sit down and discuss your needs with you. It is a mistake to think that you have to tolerate poor service. An agent who is courteous and caring will make all the difference to you.
- Investment Scam
Despite all the negative publicity, thousand of people are being caught with investment scams. Be very wary of ‘free’ offers, such as investment seminars or trips to inspect property in distant areas. No matter how good these offers seem, many are a nasty business where people are tricked into buying properties at hugely inflated prices. Often, it is not until they try to sell they discover how badly they have been duped. Be wary of anyone who is trying to sell you something because it is a good investment or it has tax benefits or a guarantee. Do your research and Don't sign Anything without getting independent advise .
- Exceeding Your Future Financial Limits
Financial Stress is Horrific. It tears families apart. The most important financial question to ask yourself, before you buy a home is “What is the worst that could happen?” What if interest rates rise? What happens if you buy based on two incomes and you lose one income? Think of the future. Your financial limits today will rarely be the same as your financial limit in the future. Sure, it might be better. But what if it’s not? What if things get worse? Play it safe. Make sure that when you buy a hoe you will be able to keep your home.
- Not Getting Ahead
Can I suggest that when you do find that home you want. You do things slightly different for yourself, in the way of your repayments. You will be happier in the long run.
- Make your first Repayment on the day you settle, that way you are always in advance.
- If you get a honeymoon rate or a discounted interest rate, make you payments as though you are paying the full price. This will save your years!
- Make you home loan payments fortnightly instead of monthly.
- Try to pay a little extra, even $10.00 per week can make a massive difference to a 25-30 yr mortgage
- If you are like most people, you won’t live in the same house for the entire 25 -30 years of your loan. With many home loans, you can now sell one home and buy another without having to reset your loan, thereby avoiding all the normal set-up and exit fees.
- There are many banks around that offer packages whereby you can pay a fee per year and giving you no account fees or transaction fees. Also saving you a bucket.
Buying a home can be one of the most exciting and rewarding times of your life.
Don’t let it be spoilt by things that can be avoided.
If we Can be of assistance to you in any way please feel free to contact us.
or phone 07)55 78 4000