Buying a home is one of the biggest financial decisions you’ll ever make. Whether you’re a first-time buyer or an experienced homeowner, it’s easy to make mistakes that could cost you time, money and unnecessary stress. Here are 10 common home-buying mistakes – and how to avoid them.
1. Not Getting Pre-Approved for a Mortgage
Many buyers start house hunting before knowing how much they can afford. Without a pre-approval, you could fall in love with a home that’s out of your budget – or miss out on your dream home because another buyer was financially ready.
Get pre-approved for a mortgage before you start looking. It will show sellers that you’re a serious buyer and give you a clear idea of what you can afford.
2. Overlooking Additional Costs
The purchase price isn’t the only expense. Many buyers forget to account for stamp duty, conveyancing fees, council rates, strata fees (if applicable), insurance, and maintenance costs.
Factor in all costs before making an offer. A good rule of thumb is to have at least 2-5% of the home’s price saved for closing costs and an emergency fund for unexpected expenses.
3. Skipping the Building and Pest Inspection
A home may look perfect, but underlying issues like plumbing leaks, termite damage, or foundation problems can turn your dream home into a nightmare.
Always hire a licensed building and pest inspector to check the property thoroughly before signing the contract. The cost of an inspection is small compared to the potential cost of major repairs.
4. Letting Emotions Drive Your Decision
It’s easy to fall in love with a home based on aesthetics, but don’t let emotions cloud your judgement. You may end up overpaying or buying a home that doesn’t truly meet your needs.
Stick to your budget and checklist of must-have features. A beautiful home is great but functionality and location matter more in the long run.
5. Not Researching the Neighbourhood
Your dream home won’t feel perfect if it’s in a location that doesn’t fit your lifestyle. Issues like heavy traffic, a long commute, or lack of local amenities can become major frustrations.
Spend time in the neighbourhood at different times of the day. Check out schools, nearby shops, public transport, and traffic patterns before making an offer.
6. Ignoring Your Credit Score
Your credit score affects your mortgage rate and loan approval. A lower score could mean higher interest rates, costing you thousands over time.
Check your credit report before applying for a mortgage. If needed, pay off debts and avoid taking out new loans to boost your score before buying.
7. Making a Large Purchase Before Settlement
Many buyers make the mistake of financing a new car, furniture, or making big purchases before settlement. This can impact your debt-to-income ratio and even cause your mortgage approval to fall through.
Wait until after settlement to make big financial moves. Keep your spending minimal to ensure your mortgage remains secure.
8. Not Understanding the Loan Options Available
Not all mortgages are created equal. Choosing the wrong one could mean higher repayments or less flexibility in the future.
Research different types of loans (fixed-rate, variable-rate, interest-only, etc.) and speak with a mortgage broker to find the best fit for your financial situation.
9. Failing to Negotiate
Many buyers assume the asking price is set in stone, but negotiations can help you save money on price, settlement conditions and potential repairs.
Work with a real estate agent who can negotiate on your behalf and ensure you’re getting the best deal possible.
10. Rushing the Process
Buying a home is a major commitment, and rushing can lead to mistakes like choosing the wrong home or skipping important details. Take your time! Work with an experienced agent who can guide you through each step and make sure you’re making the right decision. Buying a home doesn’t have to be overwhelming! Avoiding these common mistakes will help you make a smart, stress-free purchase.
If you’re ready to buy a home, you can connect with a trusted real estate expert at BHGRE today – we’ll help you every step of the way!
Disclaimer: The opinions posted within this blog are those of the writer and do not necessarily reflect the views of Better Homes and Gardens® Real Estate, others employed by Better Homes and Gardens® Real Estate or the organisations with which the network is affiliated. The author takes full responsibility for his opinions and does not hold Better Homes and Gardens® Real Estate or any third party responsible for anything in the posted content. The author freely admits that his views may not be the same as those of his colleagues, or third parties associated with the Better Homes and Gardens® Real Estate network.