First Time Home Buyer? Avoid These Critical Mistakes - Pearl Financial

First Time Home Buyer? Avoid These Critical Mistakes

By Shane | First Home Buyer

Feb 06

First time home buyers almost always make a few mistakes when buying their home. Perhaps, they pay too much, choose the wrong type of mortgage, or neglect to budget for needed home improvements. Working with a trustworthy mortgage broker can help prevent such mistakes but home buyers need to take responsibility for their budgets and choices. Before buying a home, home buyers need to develop a short-term and long-term perspective on their purchase. Here are the critical mistakes you should avoid not only to make your purchase easy but also to save thousands of dollars.

  • Not conducting your research.

You need to do some detailed research to work out the market value of the property before deciding whether you’re getting a good deal or not. It’s a process called comparative market analysis wherein you’re trying to negotiate the best possible price. See as many properties as you can in a six to twelve-time frame if possible as prices in real estate can move quite substantially. It is recommended that you inspect as many properties as possible within that time frame and document all essential features.

Be prepared to invest time in order to get a good deal and save yourself thousands if not tens of thousands of dollars, because being unprepared will leave the selling agent with the advantage when negotiating the price with you.

 

  • Thinking that selling agents are there to help you as the buyer.

Selling agents are not there to help you get a good deal because honestly speaking, they are working for the seller, not the buyer. They can also be persuasive especially when they’re using negotiation and influencing strategies. You need to ask the right questions and do your own research if you want to know the important details about the property.

 

  • Searching for a property without finance approval.

Another critical mistake that you should avoid is searching without pre- approval. You don’t want to watch your dream home slipping through your fingers while someone else is exchanging contracts. It can be a very emotionally tiring experience especially while you’re still trying to arrange an interview with a mortgage broker or your local bank. Save yourself time and avoid being on an emotional state by making sure you know how much you can borrow before you start searching.

 

  • Overstretching your finances.

You’ve seen the heartache of thousands of people across Australia who have financially committed well beyond their means. Be sure not to do that mistake. You wouldn’t get yourself into trouble if you make sure your repayments are no more than 25% of your total household net income. Given also that you don’t borrow more than 80% of the property’s value. Following that will help you avoid paying mortgage insurance and you have some equity in your property just in case there’s a down turn in the market. It’s always much better to have a smaller house than to be constantly worried about having your home sold from under you.

 

  • Not arranging an inspection.

There are different possible problems in any home that you’re not likely to see for yourself. From termite manifestations, dodgy wiring, sub-standard renovations to having a peace of mind, make sure that you get appropriate inspections.

 

Whether you’re searching for properties, looking to build or buy your first home, refinance, or planning to invest in property, a specialist mortgage broker can help. Get assistance from a mortgage broker.

 

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About the Author

Shane specialises in helping Gen Y professionals and business owners make an impact by accumulating more assets, generating more income, and having more time to enjoy life. He has a Master of Applied Finance, an MBA, and a Master of Financial Planning. He is also a terrible golfer.

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