It’s a huge investment, isn’t it? Not just a house but a home – the place where you and your family will live, perhaps for many years to come. If you get it right, your wellbeing and bank balance will benefit. Get it wrong and you could be in a world of pain, digging your way out of a financial and administrative nightmare.
So let’s look at the five main issues to avoid when buying your new home.
1. Failing to do your homework on prices
How do you work out whether you’re getting a good deal? By studying the asking price and selling price of multiple properties. Asking prices alone don’t really tell you much. Unless you know what houses are actually selling for, you can’t work out the average differential in your area.
Once you know the differential, you’ll know what price is realistic for the property you’re interested in. And you’re more likely to be able to spot a bargain, or the property that is overpriced.
Attend lots of Open for Inspections, and study the housing stock in your desired locale. You’ll learn which houses or apartments get snapped up quickly, why and for how much. So when you see ‘the one’, you’ll be ready to strike.
2. Not looking beyond the first impression
It’s fashionable now to ‘dress’ properties for sale, ensuring they make a wonderful first impression. This practice can hide a multitude of sins. Many property hunters get dazzled by a property cleverly tricked up, paying more than it is realistically worth and failing to spot problems lurking behind the gloss.
With stylishly dressed properties luring punters, original and unloved properties which haven’t been touched in years can sometimes be overlooked. If the structure is sound, cosmetic issues are relatively easy to address, and you might well buy the property at a lower price.
3. Not getting a pre-purchase inspection
This could be the worst mistake you ever make in the property market. You can work wonders with a tired, run-down house, but not if it’s riddled with timber pests or had an undisclosed fire in its roof. Don’t expect the vendor or agent to tell you the full story - it’s ‘buyer beware’ when it comes to checking these things out.
Pest and building inspections are essential if you’re seriously wanting to put in an offer. They can reveal numerous hidden problems which might make you run a mile, or at least negotiate a lower price to cover the cost of fixing them. Chances are, the vendor knows about those borers or sub-standard renovations, and may be prepared to settle for less in order to sell the property quickly.
With Compare Inspections, you can re-sell your report if you don’t go ahead with the purchase, and get money back. There might also already be a report on the property you’re interested in, saving you money and time.
4. Searching without finance approval
It’s a common story. You’re out and about in the property market, just browsing, when you fall in love with your new home. Desperate not to lose it, you make an impromptu offer and hope for the best. Trouble is, your bank doesn’t know about it.
While some vendors and agents are willing to take offers subject to finance, you have far stronger bargaining power if you’ve worked it all out before starting your property search. An unconditional offer is far more appealing, and removes the stress of uncertainty. Make sure you get your finance pre-approved and documented, with access to an immediate deposit. This way you beat off the competition.
5. Ignoring the hidden costs of buying a new home
The asking price for your home is only the start. Make sure you know the stamp duty amount, as well as a comprehensive figure covering conveyancing, legal, mortgage application, mortgage insurance, valuation and settlement fees. Then there’s removal costs and insurance before you even look at council and water rates, along with strata and body corporate fees for units and apartments. Oh! And don’t forget the maintenance costs for repair and upkeep of your lovely new home.
What’s that? You won’t be moving after all? It’s worth it, you know. As long as you spend some time doing your homework before you buy!
By Darel McBride
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