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5 Biggest Home Buying Mistakes

Buying a new home or an investment property is a very emotional and energy consuming ordeal even at the best of times! It is very important to have an action buying plan to keep you focused on the process as at times you may feel that you have been thrown in the lions pit hoping for a life line.

The following guide will set you on the right track to purchasing your new property.

  1. Not doing your home work: Information, information, information! There is a lot of free information on the internet, talking to local real estate agents, news papers, free e-mail alerts from most reputable property search web sites, property magazines and television lifestyle shows. Doing your home work and gathering the right information will serve you well when negotiating your offer price. Using respected property price guides reports for a small fee will enable you to obtain very detailed reports showing Recent Property Sales history in a particular suburb and also information on post code demographics and median property prices, these reports are a must buy and should form the basis of your research. Please see why buy property sales reports?

  2. Have your personal team of advisers: You should never rely on the sellerís real estate agent for advice when it comes to arranging for inspection reports, valuations, investment advice, legal advice or referring you to one of their home loan consultants or any representations made on the general state of the property you are buying. It is a well known fact that the real estate agent is loyal and acts in the interest of the seller besides; it is the seller that pays him the commission. It is always wise to hire your own solicitor to undertake all necessary work. Meet with your banking consultant to obtain your finance approval before making an offer on the property. Obtain taxation advice from your accountant especially if you are purchasing the property for investment. You need to be aware of tax benefits such as depreciation and other deductions and offcourse the pitfalls of investing. Your team of advisers should be qualified respected professionals working for you and not the seller so that you can be assured of independent advice and have the information to make informed decisions.

  3. Do not change your employment: Not wise to change your employment situation just before you apply for finance to buy your property. Banks need to see steady to strong employment history when they assess your financial borrowing capacity. Employment history of under a year in a new job may prove to be a hindrance in obtaining finance. Deciding to become self employed from a salaried position will also be detrimental to your prospects of obtaining finance as banks will want to see at least two years trading results. Even though these days self employed people may qualify for Low-Doc Home loans however, the very least of requirements in this instance is that they show that their ABN (Australian Business Number) has been registered for at least two years prior to applying for finance. Employment changes should only be considered after the settlement of your new property.

  4. Not undertaking property inspection reports: As a fundamental rule you should always have your solicitor undertake all the necessary searches when buying a house, building inspection and pest control reports. This will ensure that the property you are buying is in compliance with local council by-laws. Alternatively if you are purchasing an apartment or a town house under strata title it would wise to consult the strata manager or the body corporate manager for the building to discuss any defects and or maintenance issues pending. As a prospective purchaser you are entitled to view the minutes of the body corporate meetings and in the event that any adverse conditions exist they will be disclosed accordingly. This may save you a substantial amount of money especially if the building you have chosen is in need of major renovations and repair that might not be covered under builders insurance.

  5. Take due diligence and care before signing the contract of sale: You should not allow anyone force or rush you into signing any document. You must understand how the terms and conditions affect you and your circumstances. If you are not sure as to the meaning of some conditions, ask for further clarification you must always be in control of the process. Identify every cost expressed in the contract that will be outlined for disbursements. As a general rule you should never sign a document that does not include all pertinent facts to your circumstances. Make sure that the document has numbered pages so that you may consent and sign every page.

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