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Home buying mistakes to avoid

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Are you sometimes a little rash when making big decisions>? Or are you a careful planner that researches for hours, days, months before making an important move like buying a house?  We know that you've worked super hard to get into a position to buy a home. With the right guidance you can achieve your goals a lot easier and with a lot less stress. 

1. Have a realistic view of costs

It’s one thing to look at the purchase price of a property you really really want. But have you considered everything else? We mean, stamp duty, deposit, strata levies, insurance?

What if I don’t have enough for a deposit?

Any friend or relative can be a guarantor on your loan, however there is a risk they take. If you forfeit your repayments, you risk your loved ones jeopardising their property. Think long and hard about whether you can manage a loan before bringing other people on this journey with you. 

Tip: If you’re struggling with a deposit of your own and need a guarantor, consider buying property for investment rather than to reside in. Do your research and pick a unit or house with high rental residual to help repay the majority of the loan back. More information on guarantor loans.

But what if rates go up and rents decrease? Ask a finance expert about trends in the market and the best next direction you need to take.

2. Buying blind

So there’s an excellent property available interstate. Looks good on paper, looks good in the virtual tours, the value for money is incredible and it’s already tenanted. But, you just don’t have time to fly over and inspect it so you buy it anyway. What could go wrong? The virtual tour may not have shown you the handsome transmission tower standing right next door.

You should inspect each and every property you are serious about purchasing. You don't want to part with hundreds of thousands of dollars in vain. 

Physically inspecting a property is integral to the look and feel of the place and more. You can’t judge a book by it’s cover, and you sure can’t judge a house by it’s photos gallery. If you’ve ever been wooed by an online house profile, only to be disappointed upon inspection, then you ought to know the risks of purchasing without checking it out first.

3. Big ears

It’s good hearing about people’s different experiences when it comes to investing. And there’s certainly a great mix out there. From positive to negative results and everything in between, you’ll hear it all. But who do you really heed advice from? How many ‘experts’ do you listen to before making a decision on how to buy property?

Feel free to take on board feedback from friends and family, but be sure to check in with a financial advisor for personalised and specific advice. 

4. Limiting selection

Picking the best out of two houses is not going to get you far, limiting your selection will also limit your chances in buying the right house for your money. The more properties you inspect, the better the comparisons and the better your perspective.

From auctions to regular sales, inspect inspect inspect! Look at it this way - do you buy the first pair of shoes you lay eyes on at the shops when it’s shoe-shopping day? No. You window shop until you actually like the look and shape of the heel, the front, the texture, try a few on, before bingo! The right shoe fits. 

The right house or apartment will almost speak to you. There is such thing as the right look and feel. Some call it feng shui, others call it awesome construction or designer potential. Whatever it is, you’ll know it when you see it. As long as you remain realistic about what you can afford and the most convenient location to schools and work. 

I only inspect houses ‘for sale’

There you go again. Limiting your property buying selection. What about auctions? 

 There’s a good percentage of people who steer right away from auctions for fear of the price getting too high, feeling too shy to bid or bidding emotionally instead of logically.

Auctions can feel a little confronting if you’re new to them. There's certainly a sense of hype and over excitement during an auction which sometimes deter people from going. Not everyone wants to make crucial decisions in a loud and lively environment.

The tips to take with you when going to auctions, is:

 

This article was originally published by Mozo at https://mozo.com.au/home-loans/resources/guides/home-buying-mistakes-to-avoid. This information is general in nature. does not take into account your personal situation and does not constitute financial advice. Please refer to any relevant terms and conditions associated with any financial product offering.