5 common mistakes home buyers make

The savvy home buyer knows that preparation is everything. The more you know about the process, the less mistakes you’ll make. Here are some common mistakes home buyers make (and how to avoid them).

1. Not getting loan pre-approval

While it’s not compulsory, getting pre-approval is very useful. Not only does it give you a realistic idea of what you can borrow, it means you can put in an offer with confidence. It’s best to shop around to find out what banks are willing to lend you.

2. Forgetting about extra costs

It’s the silent ones that can sting. Just remember there are usually upfront and ongoing extra costs you need to weave into your budget. These include:

• Council rates
• Stamp duty
• Lenders Mortgage Insurance
• Additional insurances
• Loan fees.

3. Getting the wrong home loan

Structuring your loan to your financial circumstances makes sense, but it’s important to think about your future needs too – not just your current ones – particularly if you might want to turn your property into an investment.

4. Giving up too much information

By keeping some of the cards close to your chest, you can have more negotiating power. Remember that real estate agents aren’t only looking to get the best price for the seller, they’re also looking for a sale for themselves – so there’s often wiggle room to negotiate.
Either way, here are some things to keep to yourself:

• That you’re on a tight timeframe. Even if you are, don’t reveal your timeline – otherwise the agent might start pressuring you into making a quick purchase that might not be right.
• Your maximum purchase price (the real one). There’s no harm giving a false maximum before an auction, just to see if the vendor is keen to settle beforehand.
• How keen you actually are. You need to show interest, but it’s also wise to hold back a little – just so the real estate agent knows it’s not your only option (even if it is).
• That you’re not clued into the market. Being in the know tells the agent you won’t be taken for a ride.

Of course, agents aren’t your enemies. They want to make sure they’re selling the home to the right person, and ultimately, they’re there to help you too. Try and work with them as much as you can.

5. Letting emotions take over

We can’t deny how exciting buying a house is. We also know how quickly emotions can creep in and compromise rational decision-making – for example, saying to yourself: “what’s $10,000 in the scheme of things?”.

Make sure your expectations are set from the start, you’re clear on the non-negotiables and you don’t go over your approved budget. Remember, there will always be another dream house out there for you.