You have your pre-approval and it’s time to go shopping.
It’s one of the most exciting milestones in your life and also one of the most complex. It’s also a time that many property buyers are poorly prepared for.
Let’s look at how to be better prepared for the journey.
1. Trying to ‘’time the market’’
It’s easy to become caught up in trying to time the market.
Understandably there are times in the property cycle that are more favourable to buyers. Other times vendors appear to reap more rewards.
However, over-thinking the “what ifs” – i.e. is the price too high? Is it at its lowest? Should I wait? etc. and putting off buying becomes a risk in itself.
The right time to purchase is when you are in the position to do so.
It’s when you have a clear plan and finance approval, along with ability to comfortably afford the first home or investment property you purchase. Don’t allow short-term influences to cloud your long-term goals.
2. Understanding values
Don’t look at properties above your budget. Why? Because it’s unrealistic – if you spend your time dreaming of properties that you can almost afford, what you’re really doing is missing out on opportunities that you can afford. That’s the difference between reality and wishes.
Whether it’s your first home or first investment property, it’s important to see the bigger picture and keep your expectations in check. Don’t shortlist anything you can’t comfortably afford. Comparisons with properties above your budget will only leave you feeling dissatisfied with everything you could buy now.
3. Forgotten costs
The price you place on the contract of sale isn’t the only cost of buying a property. Many buyers risk falling short by not factoring in stamp duty, legal fees, council rates, body corporate fees (where applicable), insurance, moving costs and any initial works that the property may need. Make sure you have a clear understanding of these costs prior to placing your offer.
4. Skipping due diligence to save money
Buying an investment property or first home is the largest purchase most people will make – one you can’t return for a refund on the Monday after. Yet many don’t see the value in spending money on pre-purchase legal advice to ensure there’s no hidden threats in the contract or building inspection.
Entering into a contract without understanding what you’re really signing for leaves you exposed to potential “invisible’’ building issues – a huge risk.
5. Expensive Bargain
The saying “a bargain is expensive” couldn’t be more true when it comes to cheap properties. The risk of buying the cheapest home in the street will come with an expensive price tag in the longer term. Don’t risk buying a problem – do your homework and understand what the pitfalls are.
6. Fear of missing out or “FOMO”
Many buyers don’t like the idea of missing out and often risk buying the wrong property and the costly compromises that will come with it. Stay focused on what is important – not only in the property itself, but also on your budget.
Your first property is the building block for your next, so it’s important to take the time to get it right.
Want to know some more costly mistakes to avoid when purchasing your investment property or first home?
Book your initial consultation with Lynda McNeill at Inview Property Group today.
