Buying your first home is a very exciting part of life, but there are a number of mistakes that you can make if you jump in too quickly.

Fortunately, each of them is easy to avoid.

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Not getting pre-approval

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The most common mistake first home buyers (and others) make is not having their finances approved prior to submitting an offer. This can be even more costly if you’re looking to buy a home at auction, as sales are unconditional.

The best thing to do is work with a mortgage broker well in advance of starting your search. That way, you’ll get a very clear understanding of what your budget is going to be, and most importantly, if you’re going to be approved or not.

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Underestimating additional costs

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When purchasing your first home it’s easy to forget about everything that comes with owning a home as well as the additional costs to purchase it.

While first home buyers can get exemptions from stamp duty (varies between states/territories), they will still need to be prepared to pay other costs such as settlement/conveyancing, home insurance, moving costs, inspection reports, council rates, water rates and transfer fees.

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Getting too emotional

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When you’re buying a home for yourself or your family to live in, it can quickly become a very emotional experience.

When buying your first home, it’s important to be clear on the true value of that property and only pay a fair price for it. The best way to do that is by looking at comparable sales of similar properties in that area in the past 3-6 months. Use that as a guide when negotiating and purchasing.

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Forgetting about Building and Pest Inspections

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One of the most important but overlooked parts of the buying process is skipping the building and pest inspection.

If there are any structural issues or a pest problem like termites, this could end up costing you tens of thousands of dollars to repair and could cause issues if you wanted to on-sell the property in the future.

If you’re buying at auction, this inspection needs to be done prior.

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Overstretching your budget

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Just because you’re able to borrow a certain amount of money from a lender doesn’t mean you have to spend the entire budget on your first property.

It’s important to make sure you can manage any repayments you take on. If you’re taking on a loan with a variable interest rate, you need to be prepared in the event of a rate rise. Fixed-rate loans also revert to variable loans after a certain period of time, so you must know your budget well before taking on a mortgage.

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