The top 5 mistakes first home buyers make

This blog is written by Emily Wallace – Buyers Advocate and Founder of The Buying Coach. Listen to our our episode with Emily below:

Let’s face it, school doesn’t teach you how to buy a house. It isn’t your fault for making mistakes in the home buying process. After all, this isn’t an exercise carried out daily for many Australians. For most, purchasing property may happen a grand total of three times in a lifetime! As a Buyer’s Advocate, I have seen varying levels of buyer education. Here are the top five mistakes I see first home buyers make:

1. Don’t have finances in order

Picture this, you go out for dinner and it comes time to pay the bill. When it comes to tap your card, do you just hope that there is enough money in your account? Or are you in fact aware that you have sufficient funds to pay for the meal you have just consumed? Hopefully you are nodding your head to the latter. So let’s apply the same theory to home buying. You don’t start shopping until you know what you have to spend! The first thing you must do is understand your borrowing capacity which will help to understand your maximum purchase price. I would strongly encourage first home buyers to do this through a recommended mortgage broker.

2. Too trusting of the real estate agent

Unfortunately, all too often I see first home buyers being mislead by real estate agents. This isn’t because agents are bad people, it is purely down to the fact that they are doing their job. What is their job again, I hear you ask? Their job is to achieve the highest purchase price possible for the vendor. Although you need a buyer and a seller to transact a sale, ultimately, the agent is being paid by the vendor through an agreed commission upon successful sale. Always keep this in mind and consider seeking independent representation from a Buyer’s Advocate to work in your best interest.

3. Focus on styling

On average, over 80% of the properties I personally inspected are styled by a professional staging company. This is a very common scenario and it is to make the home more ‘sellable’ through creating a feeling in the painting, furniture and finishes. Do not be fooled! Remember, the styling doesn’t come with the house you are inspecting. Don’t be afraid to lift up the rug in the lounge room (it may be covering a nasty stain) or look behind that hanging picture (it may be covering a hole in the wall). Take your eyes off the styling and focus on the existing features.

4. Lack understanding of the end goal

Often a first home purchase is not a forever home purchase. Let me explain. It is a very common situation that first home buyers want to get themselves into the market and on the property ladder. This usually means that the end goal for the first home they purchase is in fact to turn it into an investment when they purchase the next property. This means you need to think as an investor, not a first home buyer. Is it a rentable property? What would the return be? Does it have good access to public transport? Are you buying in an investor heavy area? These are all things to consider.

5. Don’t inspect enough properties

To truly understand the market, you need to inspect multiple properties. That’s not to say that the first property you inspect is the right one, it could be, but how do you know? Understand what other options are out there as well as watching auctions in the area can really help you understand the current market and where the value will fall on your desired home.