Buying a new home can be one of the biggest decisions that most people will make in their lives. There are so many factors to consider, and potential pitfalls to avoid. Here’s a list of some of the top mistakes we’ve seen people make over the years. Fortunately, these can easily be avoided through the right preparation and research.

1.   Not having a clear idea on budget

Before beginning your property search it is crucial to have done your homework on the type of property you can afford. A proper budget will help guide your search as far as the neighbourhood and type of property to target, and also help avoid over extending yourself. It can be a good idea to talk to a home lender or mortgage broker early in the process, as they can do a thorough assessment of your financial situation and give advice on what you can afford and what amount the bank will likely lend you. If you are able to get a pre-approval this will put you in a strong position.

2.   Choosing the wrong home loan

It is a good idea to shop around for the best home loan deals, as it can potentially save you thousands of dollars in repayments over the longer term. Many home buyers tend to accept the first home loan offer they receive, as they may be loyal to a particular bank or too time-poor to research the various home loan options. With interest rates so low at the moment most lenders are offering very competitive rates, but it’s still important to put the time into finding the best deal for your situation. The right solution can go beyond simply who is offering the best interest rate.

3.   Not doing enough research and offering too much

Nobody likes to pay more than they need to, but sometimes we see buyers who become caught up in emotions and offer too much on a house. In order to determine a fair price for a property, you need to thoroughly research what similar properties are being sold for in the area. If you have your property type and upper limit predetermined, this keeps you accountable and helps avoid making a ‘rash decision’ that you may later regret.

Having insight into any planned infrastructure upgrades is also vital, and the type of impact they will have on property prices. For example, the addition of a new train station in the area may significantly increase surrounding property prices, whereas the installation of an unsightly mobile phone tower next door might devalue a property.

4.   Rushing an offer for an unsuitable property

The property market in Melbourne is hot right now, so it may be necessary to act fast with an offer if you find a good property . The need fors peed shouldn’t mean you don’t do your due diligence to ensure the property meets all your main criteria. The stamp duty costs of changing properties in Victoria are significant, so it’s important not to rush through a decision that you will regret later.  Again, being prepared ensures you have covered all bases.

5.   Skipping the due diligence

You can avoid any surprises down the track by thoroughly inspecting a property, and arranging a building and pest inspection. Although these inspection costs may seem high, they can save so much money and stress in the long run. Engaging a solicitor or conveyancer to properly review the contract can also pick up any issues in the fine print before you put ‘pen to paper’.