Buying your first house is a turning point for many young people. In order to make sure the process runs as smoothly as possible, you’ll want to avoid these 3 common mistakes frequently made by first-time buyers:
1) Skipping out on research
Although speaking with an experienced real estate agent will help to an extent, doing your own research prior to buying is absolutely essential. You need to invest money in a property, but you should also be prepared to invest your time in it too. Researching a property and area will mean you have a good idea of the property’s market value. This will allow you to provide a strong offer first time, then counter with a lower, more reasonable price. By doing this, you’ll likely be able to secure a good deal.
Refine your search and view several similar properties to ensure you get a good feel for what’s on the market. There are several key points that you’ll want to keep an eye out for:
- Building structure
- Storage space
A smart-looking interior can go a long way to driving a sale, but you need to stay focused and look beyond that with the above points.
2) Not assessing your mortgage options properly
When buying your first home, it’s easy to get buried in the relentless advertising from mortgage companies. The key, however, is exploring all of the options available to you.
Get in touch with several local banks and ask them to help you to prepare a specific financial plan. It’s important to know what the market has to offer, as there are hundreds of lenders all offering varying rates. Pick one that fits your financial plan.
Don’t get too weighed-down by the benefits, as they’re usually there to balance out the fees. Instead, focus on picking a mortgage plan that’s simple – especially for your first year.
3) Forgetting to address any additional costs
If you haven’t bought a house before, you’ll be amazed at the sheer amount of additional charges that come with it. These include, but aren’t limited to:
- Stamp duty
- Home insurance
- Moving costs
- Inspection reports
- Council taxes
Based on a $500,000 property with a 5% mortgage rate, realestate.com.au calculated the costs that would be associated with each of the above.
Stamp duty, no matter how irrelevant it might sound, would set homeowners back an additional $17,990. Legal fees rank between $1,500 and $3,000. On top of that, a building inspection prior to purchase will cost an additional $300. A loan application will cost around $600, council tax will cost $500-700, and if you need to pay Private Mortgage Insurance, that will come in at $7,920.
There’s no need to be intimidated by the costs associated with buying your property, but there’s every need to be aware. If you’re still concerned, get in touch with our real estate professionals, who will be happy to guide you through the process.