Planning on buying a house requires a careful decision and so is purchasing your very first home. Here are the top ten things which you will need to avoid with regards to purchasing your first and brand new home.
1. Not Securing the Pre-Approval
Once you have decided on buying a new home, one of the most important things that you have to deal with is to be pre-qualified for a loan. Through this approach you will determine if you can afford the offer of the loan provider at the earliest time. You can also take the necessary preparation for seeking your preferred home location. Be sure that the pre-approval of the loan provider is written. Through this you are confident that you can make a potential offer on a property auction or on a new home.
2. Unable to do the Research
If you failed to understand the market and what properties are worth buying, you will also fail in obtaining the appropriate property at a reasonable price. There are numerous areas where you can search for property prices. You can take a look at auction entries from newspapers, search the internet or perhaps inquire current property sales from authorised real estate agents. You can also take a look at the sales report records of a suburb which you find interesting. Sales reports can provide you a complete breakdown of sales on a street to street basis.
3. Does not understand the entire Sales Process
Before starting into your research, beware of the feasibility of buying a house. For instance, you need to understand how auctions and biddings work, what is the best approach of making an offer or perhaps learn the basics on purchasing a property. It is also essential that you know the tricks and traps of real estate agents. You can also seek the opinion of family and close friends who happen to have had home buying experiences.
4. Not Considering all the Factors/ Issues Within the Property
While searching for your ideal first home, you have to consider other important issues apart from checking the outdoor area and rooms. You need to take account of the following:
- What your neighbours are like
- Aircraft Noise (for areas near the airport)
- Traffic levels of the local area
- Available parking spaces
- Disturbing industrial activities
- Improvements and developments near the area (you can ask the local authorities w/ regards to this concern)
- How does the streets look
Here’s a helpful tip: Try to visit the surrounding area of the property at different days and also at different times. See what issues you will encounter. This will assure you that there will be no concerns that can affect your quality of living after you move in.
5. Selecting the Wrong Area
The location of your new home is a big part of your day to day living, thus it is very important to make the appropriate decision when selecting for an ideal place to live in. Here’s a helpful list to check out if you have chosen the suitable suburb. Try to consider these issues:
- Check the public transportation facilities. How do you find it?
- Is there a need for you to commute for many hours just to get to work?
- How do you find the environment and the local facilities?
- If you have a family or are planning to start one, are there any child care services located near the area like day care, pre-schools, parks, childcare centres, hospitals, and etc.?
6. Unable to get a Strata Report or Property Inspection
Perhaps you have heard about tragic stories from those who have purchased a new house and in a few months it suffered from a termite infestation. You might think that this could never happen to you but take note that buying a new house demands a very expensive financial commitment from you. It can even lead you to shocking expenses if you will not survey the property with building and pest inspection before making the purchase.
A. Pest and Building Property Inspections
Once the property inspections is done prior to the purchase, you will be able to take account on the current state of the property, the bid at the auction or the contracts will have the statements of the existing state of the property and you will be able to pinpoint any damages including building defects, cracking walls and the like. Hence, you will be able to determine the possible cost for fixing them. A detailed building report can cost you more or less $500. Of course, you also need the permission of the property owner prior to the inspection.
A pest inspection report is different from the building inspection report. The building report focuses on the physical or visual damages perhaps caused by termites and it will not include the existence of timber damaging pests including termites. It is recommended that you get a separate building and pest inspection report before buying a property.
B. Strata Searches
Once you purchase a strata property, it is very important that you perform a strata search, one which looks for the entire report of the strata scheme. This search can help you discover unknown factors which can affect your potential of becoming the property owner. You can do the record search yourself if you can’t afford to pay for the strata managing agent. You can also ask the assistance of companies which specialises in services that provides reports and information that you need to know. Commonly, these services can be arranged by your solicitor and will discuss with you critical matters including owner disagreements, proposed or current litigation and any other financial issues which can possibly affect the new owner.
7. Not acting immediately
Once you have seen your ideal house, you might want to act immediately. It might be the first house or the ninth apartment that you see, if you think that it is the right one, affordable and you have done all the necessary research and gathered all the important info you need, don’t let it wait for too long. Make the offer right away before someone else will get it.
Here’s a tip: Do not buy a property which you are unsure of.
8. Unaware of Gazumping
After you already made the offer and it has been accepted verbally and the real estate agent informs you that the deal is closed, don’t be tricked and believe that that property is now yours. Wait for the time when you and the owner changed and signed the legal binding contract. In case there is another buyer who is also interested in the property, ask your real estate agent if they offer a higher bid so you can counter bid.
9. Being emotional
Searching for an ideal home can be stressful, it would be best if you will not let your emotions stand in the way since it can greatly affect your transaction. This is evident in auctions since bidders can be easily get carried away. If you find yourself emotionally attached, it would be best to ask someone to do the bidding for you.
10. Getting beyond your Budget
For any homebuyer, you must not go beyond your financial means and budget, doing that will affect you and your family’s financial state. It is always best to play safe and consider the things that might happen in the future like for instance losing a job or finding it hard to pay the increased interest rates.