Buying your first home can seem like a minefield. We’ve seen inexperienced buyers make unreasonable demands and bow down under pressure. We’ve also seen buyers left feeling dejected and hopeless. Have a look at these top mistakes and avoid making them yourself.
Not setting a budget
We’ve seen so many mistakes to do with budgets! Some first time buyers set a budget and then ignore it, while others fail to set one in the first place.
Being realistic about your budget will give you an idea of what kind of property you can afford. If you are unsure of your budget, you can visit an online loan calculator to get an estimate. This also gives you an idea of the monthly repayment, duration of the loan, and the amount of the deposit. However, don’t rely on an online calculation alone - visit a few different banks and shop around for different terms and rates.
Living in the Future
Some first time buyers choose their first property with the mindset that they will remain in it for the rest of their lives. The truth is, your needs will change. Your family may grown or shrink, you may also find that the location is no longer advantageous. Apart from these points, your income will likely change as time goes on, allowing you to go beyond your original budget.
Living in the Now
As a first time buyer, your budget will be limited, leading most to consider mostly lower end properties. Some may find themselves heavily compromising on their wishlist, perhaps sacrificing an extra bedroom for a more ideal location. Buyers must keep in mind that although this may not be their one and only home, they will be living in it for a number of years. This is why setting down your requirements is so important. Your property consultant will be able to help you match these requirements with properties in suitable locations that fit your budget.
Making Decisions Under Pressure
Sometimes parents and other family members will try to push their preferences onto first time buyers. This is especially common when they are giving you a hand financially. Often this stems from a kind intention but it can come through as bossy and controlling.
Your elders have most likely gone through this process, so their input can be very valuable. If they are truly concerned that you are making the wrong decision, it’s worth sitting down with them and having a calm conversation. You may not come to an agreement, but by listening to their worries you’re paying them due respect.
We love our parents and relatives dearly, but in the case of a bossy mum or dad, you have to put your foot down. Conflict can arise when choosing a location outside of your elders’ comfort zone. Ultimately, your first home is going to be your for the foreseeable future, so stick to your own preferences and resist unfair pressure.
Not thinking Location, Location, Location
Your location preferences are completely up to you and your partner. There are many things to consider when coming up with a list of ideal locations:
- Distance from work and school
- Nearby amenities
- Ease of parking
- Noise from traffic
- The atmosphere of the neighbourhood
Some buyers will start their property search with only one location in mind. This is understandable - they may wish to remain in an area they’re already familiar with, or close to their parents. However, it is a mistake to be unreasonably strict regarding location. By expanding into more locations, you may find that your budget goes further, or you may gain other property features.
Finished vs Unfinished vs On Plan
When buying your first home, you might have an image in your head about what it should look like. Some buyers completely dismiss property on plan because they can't physically visit the property as it hasn't yet been built. True, not being able to see the property with you own eyes will have a psychological effect. This may make you shy away from property that is unfinished or on plan. Big mistake!
The advantages of buying on plan and unfinished are huge. When buying unfinished property, you get to customise the space to your liking. Developers will often offer buyers a choice of finishes.
When buying on plan you will lock in the current market price of the property, even though it is still to be completed. Financially, it makes a lot of sense because you can take advantage of a relatively low initial capital outlay - the deposit - without any more payments until the property has been built. Some couples prefer to go down this route because it allows them the time to get married without the stress of still looking for their first property. Speak to your property consultant about what kind of discount can be secured when buying property on plan.
Why Not DIY?
If you have time, patience and good DIY skills, why not consider a property that requires renovation? This allows you to negotiate a lower price while customising the space to your tastes.
If you are a first time buyer with lots of questions about the whole process, why not get in touch with us today? Our friendly consultants have plenty of experience working with people who are new to this whole property thing.