Which mistakes should first-home buyers avoid in 2016?

The search and purchase of your first home can be an exciting and often overwhelming time for first-home buyers. It is easy in the midst of everything that is going on to make little mistakes that add up to have a big impact down the track. The following are 5 common mistakes that first-home buyers make:

1. Not doing research. 

Be proactive. Doing independent research of home values and recent sold prices for properties in the suburbs and even streets you are interested in will place you in a better position to make counter-offers and avoid paying too much at auction. There are numerous resources in both print and online you can tap into to study up. Become familiar with the suburb statistics and stay up to date with recent auction results.

2. Not getting pre-approval.

Be prepared. There is nothing worse than finding your dream home, only to find out that you can’t afford it. Lenders are able to give you an idea of how much they are willing to lend you before you even start your search. It is also a good idea to see what interest rates are available and shop around for a good deal. Having pre-approval also helps when dealing with agents as they will know you are a serious buyer.

3. Not getting an inspection report before you purchase

Be thorough. Many building and structural faults can go unnoticed to the untrained eye. Be sure to get an inspection report from an independent building inspector before you purchase (for units, get a strata report done). They may cost you money now, but they could potentially save you thousands of dollars down the track.

4. Not budgeting and underestimating additional costs

Be conservative. When budgeting for your first home purchase, it is important to fully understand the additional costs involved and to leave room to move for unexpected costs that may occur. Some of the additional costs outside of the purchase price of the property are:

• Moving costs
• Insurance
• Stamp duty
• Legal fees
• Transfer fees
• Inspection reports
• Council fees

5. Becoming emotionally attached

Be professional. There is no doubt that buying your first home is an emotional experience, but it is important to remember that your first home is also, in most cases, your biggest investment. So be prepared to think and act like an investor and know when to walk away.