How to Avoid 5 Common Mistakes Made by First Home Buyers 

1. Not getting Pre-Approval

It’s important to secure pre-approval before going into property research and making offers. This provides a clear picture of what you can afford and real estate agents will take you more seriously. 

A common mistake is when individuals do not want to apply for a maximum loan they can afford. As a result, they get pre-approval for an amount lower than their highest borrowing capacity. 

While we’re not recommending that you spend up to your pre-approved limit. It’s important to have the flexibility of additional funds, as increasing your pre-approval is more challenging than spending below the maximum.

2. Buying More Than Your Budget 

When you first begin searching for properties, it’s easy to be tempted by those that exceed your budget. 

Properties are often underquoted, and some agents might make you feel like you’re able to buy the property.  They encourage you to attend an auction or become emotionally attached to a property. 

This generates false hope for properties exceeding your price range. To gain a clear understanding of properties within your budget, it’s important to reference recently sold prices.

3. Insufficient Research

You may not realize that research has played an important part in buying a property.

On a broader scale, this could involve selecting the neighborhood you wish to live in. Are you familiar with the aspects of the suburbs you look for such as amenities, demographics, transportation etc?

On a more detailed level, this involves examining factors like easements, planning overlays, reviewing contracts, organizing building and pest inspections, and understanding how to incorporate these clauses in a contract. 

First-time home buyers are often caught off guard by the costs associated with property ownership. Ensure you check council and water rates, insurance, and owner’s corporation fees. 

In conclusion, take your time to familiarize yourself with the area, property, street, contract, and costs before making an offer.

4. Relying on Media’s information 

The media’s primary goal is to sell advertising, which often leads to clickbait headlines to attract attention.

The real estate sector holds significant popularity in Australia, leading to consistent news coverage. Our advice is to approach media articles and headlines with skepticism and rely on industry professionals for your property research.

Real estate agents are experts in their local areas, while buyer’s agents may possess expertise across wider regions within a state. 

5. Forgetting who the Agent is working for

Although many agents are nice and do their jobs, it’s important to bear in mind that their legal obligation is to achieve the highest price for their clients’ properties. 

This could lead to a misleading perception that they are on your side. Despite the majority of agents being reputable, unethical behavior and dishonesty can occur often driven by the goal of pressuring you to make higher expenditures. 

If you’re not experienced in dealing with agents, our suggestion is to hold certain information close and avoid revealing your maximum limit.

To learn more about how we help first home buyers in securing their property, please feel free to contact our team.