Buying Common Mistakes
14 Common mistakes home buyers make
Buyers beware - don't fall into these common traps.
Mistake 1: Borrowing
You may borrow too much based on your present situation. You must make allowances for possible changes in your circumstances in the future. Be especially careful of loans with payments that increase at a later date. Don't allow yourself to be shackled by debt!
Mistake 2: Chattels
You may spend too much on the purchase price and have insufficient money for improvements or furnishings. There are few things more depressing than having the home you want in the right area and being unable to afford curtains or light fittings. In extreme cases, the cost of the home can seriously damage your living standards.
Mistake 3: Instinct Neglect
Don't ignore your instincts. The right home has the right feel, just as the right person has the right feel. No-one should buy a home if they haven't got that feeling about it.
Mistake 4: Initial Costs
It is easy to underestimate the expense of moving and settling into a new home. When you first move to a home, anything that is going to go wrong, seems to go wrong. Things that have been working for years will suddenly break. It is almost as if the act of moving into and out of the home, displeases the home! Be prepared for a series of irritating and costly breakdowns and maintenance work. A new hot water cylinder, for example, can cost hundreds of dollars. Be prepared for it. Most buyers fail to anticipate these events.
Mistake 5: Buy a 'Rogue Home'
Be careful that you don't buy a 'rogue home' because you overlook something obvious such as noisy neighbours or smells from factories. You should have at least two inspections at various times - Saturday evenings, early mornings (especially Sunday mornings) and during wet weather if possible. You should meet all the neighbours. Get to know the home before you move in! Be suspicious of any home that has had several owners in a short period.
Mistake 6: The 'Fed-up' Purchase
You may get tired of looking. You may become despondent and buy something that is' reasonable' rather than something that is suitable. Don't talk yourself into (or allow yourself to be talked into) buying something that you don't like. This is a decision that you could spend years regretting. Be careful to buy what feels right, no matter how long it takes. If you become frustrated, it is better to stop looking for a few weeks rather than buy an unsuitable home out of desperation and frustration. With patience, that right home will always be found.
Mistake 7: Running Costs
Do not underestimate the continual expense of running a home, e.g. rates, insurance and maintenance costs. Owning a home can cost far more than renting. First home buyers are particularly susceptible to under-estimating the running costs of a family home. Very few homes can be maintained for less than $150.00 per week. That's $7,000 extra expense per year.
Mistake 8: Market Influenced
Do not be influenced by the market more than by your own situation. Waiting for prices to go up or down is to gamble with your family's future. If you find the home that feels good and you are able to afford it, you should rarely let market conditions become a major influencing factor.
Mistake 9: Over cautious
Buy within your limits, but don't go too far below what you can afford. You may spend several years wishing that you had paid a little bit extra for a better home. If you can't find a home to suit you, consider a cheaper area. Sometimes you can buy exactly what you want in a neighbouring suburb. Is a particular address really that important to you?
Mistake 10: Buy on Range
Do not buy on price more than emotion. The home itself is more important than the price, provided that the price is within your range. Some people see the home that they really want and if they can't achieve a big discount, they refuse to buy. This is often a big mistake that you may live to regret bitterly.
Mistake 11: Procrastinate
You may be tempted to make no decision. You may look for months and years. While you waste money in rent, the prices may rise and you will be left behind. Do not be too demanding and unrealistic. Be pragmatic. Realise that buying something is better than buying nothing. Home ownership is too important to risk a long delay.
Mistake 12: Friend Phobia
Do not allow your relatives or your friends to make the major decision instead of just giving you advice and opinions. Relatives and friends do not have your needs, wants or emotions. Friends mean well, but it is unfair to pass the final decision to anyone other than the people who will live in the home. Sometimes it is best to buy a home and inform your friend once the sale has been completed.
Mistake 13: Professional Inspections
It is important to hire ethical, competent and independent paid professionals to check a home. Be aware that most professional inspectors are trained to find faults. Look at the MAJOR faults. Do not let the minor faults trouble you too much. Poor guttering is of much less concern than poor foundations!
Mistake 14: Believing the Agents
Agents represent the sellers. Everything they say should be verified, not because the agents will necessarily mislead you, but simply because the agents will not have to live in the property. You will. Agents want to make sales. You want to find the right home. Some agents will want to sell you a home that is wrong for you. Don't be afraid to question the agents. Don't go to auctions. You will only get your heart broken and your wallet walloped! There is far too much deception with auctions. Inexperienced buyers should avoid auctions.