6 Common Mistakes When Buying a House and How to Avoid Them

Family relaxing on floor in new home with cardboard boxes

Buying a house is probably one of the most joyous experiences you can have in your life. Just imagine, after years and years of rents and landlords, you are finally getting your own safe heaven where you and your family will be able to thrive and make countless fond memories.

This importance, however, puts on you additional pressure to make this transition truly count.

The houses are not really a commodity we can easily buy and sell every day and the eventual mistakes you can make are often paid hefty sums of money and years of frustration. Your family deserves better than that.

Let us take a look then at a couple of tips that should help you avoid common and expensive home-buying mistakes and start your new begging on the right foot.

Have a clear understanding of how much you can actually afford

Too many first-time homebuyers make the mistake of wasting the time on properties they can’t truly afford. All good transactions start with a good budget and home buying is not an exception. So, before you start doing anything else, get your finances in order, inquire about the expenses of moving, painting, and renovation and try to determine how much you are comfortable paying for the monthly installments. If you are unsure are you going to be able to raise the necessary loan, check that in advance. All these things will help you narrow down the price tag you can afford and focus your search on the right properties.

Check the first-time home buying grants

Yes, buying your first home is a tremendous responsibility but it also comes with certain perks. Namely, virtually all governments around the world try to, at least in some capacity, help first-time homebuyers get the properties they desire. Researching these options may help you find the path forward. If we, for instance, take Australia for example, we will see that the national governments offer up 15,000 AUD of help to the eligible owners. In 2020, local authorities 25,000 AUD for home builders. You need to be aware of such grants because they can give you much leeway when choosing your future home.

Always shop for mortgage quotes

Although mortgages look like a very uniform market they are everything but. Jumping to the first offer you get or even inquire about can take a bite out of your budget, drown you in loans and damage your undermine your budget. So, don’t be afraid to spend some time shopping for mortgages and finding the offer that benefits you the most. This can be a chore, but if we once again take Australia as an example, we can see that help of a professional mortgage broker in Sydney or some other busy real estate market can drastically cut this search giving your freedom to focus on the things that matter the most.

Take some time researching the locations

Some properties may look excellent at first glance. It is only when you actually start spending time there that you see that you should never judge a book by its covers. Most of these long-term issues boil down to the location of the properties. So, while you are inspecting the house, try imagining what your routines would look like if you actually relocated there. Does the location feature all the amenities you need? How is the traffic? Do you have access to hospitals, schools, or kindergartens? How long do you need to drive to the closest cinema? These things can largely influence the quality of your life in the long term.

Choosing the wrong market

Don’t mistake this one with the location issues we have just covered. Real estate, in broad strokes, features two main types of markets – the buyer’s market and a seller’s market. The buyer’s market is your regular real estate market where you usually have good freedom of choice and go against other regular home buyers. As the name suggests, seller’s markets are oriented more toward investors and feature limited home offers. Trying to score in such circumstances can lead you to a full-scale bidding war and make you pay high above the asking price. Therefore, be sure to perform the background research.

Never empty your savings account

This usually happens when inexperienced buyers try to reach a more favorable agreement by offering overly enthusiastic down payments. Although a rule of the thumb says that the ideal down payment should sit at around 20% of the property value, you also need to take into account that you also need to save at least three to six months’ worth of expenses to be able to deal with any eventual repairs and unforeseen expenses. Out of the two, loan rates give you more freedom to address them further down the road, so deal with the immediate issues now and handle the mortgage when you bounce back.

We hope these few tips will help you avoid some of the most common mistakes made by first-time home buyers and make your fresh start truly count. Properties are very expensive commodities. The mistakes you make when buying them can haunt you too long to ever allow them. So, stay vigil, do your homework and make sure that every decision you make works to your advantage.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.