3 common mistakes first home buyers make
You’ve finally saved up a deposit and started looking around the market for houses for sale. But don’t make these rookie mistakes: overpaying at auction, buying out of your reach, letting your emotions get the best of you.
Here’s how to avoid them when buying your first home.
1. Overpaying at auction
Buyer beware, auctions can be a truly great experience but can also force you to pay through the nose.
You don’t want to regret your first home after-all.
There’s a lot to learn by visiting auctions before participating in one yourself. Do your homework and look at auction results and compare the average price of real estate in melbourne vs the property you’re looking at, for example.
It’s easy to get swept up in the excitement and adrenaline of bidding come auction day. But knowing your absolute limits, and sticking to them, will ensure you don’t dig too deep when the hammer falls.
Don’t forget that the auction price isn’t the final bill. There’s added costs like stamp duty, broker fees, building and pest inspection charges and more.
2. Buying out of your reach
Think of your first home as a stepping stone, not the end goal. Your first purchase should reflect your current situation, but also be able to accommodate any life changes in the short-to-mid term future—like having a baby. Weigh up what you need and what may be reasonable in the coming years. It’s likely you don’t need a four-bedroom house right now, a two-bedroom apartment might be better suited.
One of the first steps in buying a home is getting your finances in order and finding out exactly how much you can afford and what your borrowing power is. Don’t borrow more than you need.
You might’ve also heard of the first home buyers grant but be wondering “just how much is the first home owners grant worth?” Well, it’s around $10,000 depending on the state you’re purchasing in and the type of property you’re buying.
If you’re looking at an apartment to buy for your first purchase, consider what amenities you have access to and if they justify the price. A luxury development like Capitol Grand includes incredible common areas, pool, gym, spa, sauna, and convenient dining and retail options downstairs.
These value-adds can be worth extra come auction day, and they can potentially save you money and time in the long run. What’s more, these kinds of amenities ensure the value of your purchase remains strong.
Real estate agents often talk about “emotional connection” when selling a home. But this is one time you can’t let your heart get the better of your head.
You’ll need to muster your best poker face during inspections and auctions, otherwise agents will read you like a book.
If you fall in love with a house but it’s out of your price range, know that there’s still a house out there that fits your budget, needs, and wants.
By the same token, don’t buy for the sake of buying because you feel you’ve been looking too long. It takes patience and persistence to find the right purchase. A wrong first move could cost you for years to come.
If your first purchase is a substantial one, make sure it’s a smart investment. Look at the data available for apartments of sale in South Yarra, for example, to see whether they decline or increase in value historically. Doing your homework is key to finding the best house for the best price.
Remember these tips and apply them when preparing to buy your first home.
If you’re wanting expert advice on your first home and the market, speak to a seasoned professional. Amity’s property specialists have years of experience in the new development and apartment market in Melbourne and can help you find the right property, or steer you in the right direction.
For help finding your first home, contact the team at Amity on 03 9090 2500.
18 January 2021 News