Common Mistake Buyers Make When Purchasing A Property
Buyers purchasing a home experience a rollercoaster of emotions as part of the journey. Excitement and joy can soon turn into anxiety, stress and panic for numerous factors some of which we will try to cover in this blog.
You may be thinking, why would someone be nervous about purchasing a home? Shouldn’t it be an exciting time?
Being well prepared, doing sufficient research, buying within your means and surrounding yourself with the right Finance Broker, Lawyer and Real Estate Agent will certainly minimise your exposure.
So, let’s discuss the types of mistakes and situations that typical property purchasers making?
RELYING ON FIGURES CALCULATED BY A BANK WEBSITE CALCULATOR
A very common mistake that occurs in this digital age is that buyers use the online bank calculators to determine what the bank is willing to lend them.
There is a big difference between what a bank says they will lend you, compared to what they will actually lend you. Most of the time the pre-approvals that are issued to buyers by banks are computer-generated approvals, compared to fully assessed pre-approvals.
This causes a problem when it comes to application time as greater enquiries are made into the buyer’s situation, and most of the time the buyers borrowing capacity actually decreases.
Working with an independent Finance Broker opens more options to you in terms of the number of lenders and products available, compared to going to one lender only.
PURCHASING BEYOND YOUR MEANS
Don’t fall for the; ‘well this house is much more modern; however, it is just that little bit more expensive’ phrase.
These are the types of houses that can throw your finances out the door all together. If you are pre-approved for a certain amount, then stay below that figure. Avoid pushing those boundaries, as its very common that buyers try to push to an extent that will usually back fire.
Whether it’s your first home, or your dream home, lock down your emotions. As soon as a real estate agent gets a whiff of your emotional attachment to a property, you’ve lost your bargaining power.
CONSULT A CONVEYANCER OR SOLICITOR
Purchasing a property is a massive financial commitment and we strongly discourage you from skimping on your legal costs. Take the time to find a well-known, reputable Lawyer who you can have contact with as needed and who will ensure your interests are protected at all time.
Before entering into any contract, make sure you’ve had your conveyancer or solicitor look over it, to ensure the contract reflects what you agreed to.
These are the people who will make sure that the right clauses are present in your contract, to allow you the option to void the contract, if finances are not approved for example.
The quality of your conveyancer or solicitor determines how smooth legal process will be and ensures that you are not exposed to large financially related problems.
NOT DOING ENOUGH RESEARCH
Buyers enter the property market without understanding their families’ needs and their current financial situation.
People also enter looking for their dream home, but usually forget to think about location. Remember, its not just the home you are purchasing, but also the location.
So, research and consider the sort of schools, roads, hospital and access to public transport that would be able in that area.
Just because it’s the listing price, doesn’t mean it’s the final price. Do your research into comparative sales in the area and ensure the listing price actually reflects the value of the property?
DON’T BE FOOLED BY THE PROPERTY MARKET
The property market has its ups and downs, with times which are better for buyers, and other which are better for sellers.
Don’t be tricked into thinking that prices are going to sky rocket as soon as you start to see any movement in house prices in the market. These sorts of fluctuations are all normal trends.
KNOWING THE COST INVOLVED IN ACQUIRING A PROPERTY
The basic acquisition cost involved in any property transaction are; stamp duties, transfer duties, rates, valuation costs, application fees, and Lenders Mortgage Insurance.
Then on top of that you need to have funds available to pay for services to complete the transaction, such as; Lawyer Fees, Building and Pest Inspections, Soil Tests (if you are building) and ensure you leave a buffer for any miscellaneous costs the may come about.
REMEMBER WHAT THE ROLE OF THE REAL ESTATE AGENT IS
Unless you have approached a buyer’s agent, remember that it’s the role of the real estate agent to act in the best interests of the sellers.
So ensuring you have a good team of finance brokers, solicitors and or buyers agents behind you, ensures your interests are always a priority.
ORGANIZE A PROFESSIONAL INDEPENDENT BUILDING INSPECTION
Disregard the age of the home. Engage an independent professional to complete a detailed report to find the faults in the property.
Building inspectors are very meticulous, so do not be alarmed if there is a long list of issues. Just review them and where necessary ask for clarification. Keep in mind that all properties will have some level of problems associated with them. Knowing what the problems are up front allows you to understand the property.
Think that’s a lot? Well it’s not. These are only some of the major common mistakes that we wantws to bring to your attention so that you do not make these mistakes when you go to buy a property.