Becoming a homeowner for the first time is one of life’s biggest milestones. As exciting as the prospect of owning a house makes you feel, you should know that the purchasing process can be very stressful, especially for young, inexperienced buyers.
Before you buy any type of property, you need to make sure you’ve done your research so that you can avoid the usual home-buying pitfalls.
If you want to make the whole process go as smooth as possible, you need to watch out for these 5 common traps of first-time home buyers.
1. Not hiring a conveyancer
Buying your first home can be a rather emotional experience. Not just because of sentimental reasons like thinking about all the memories you’ll make in your new house, but also because the whole ordeal can quickly turn into a bureaucratic nightmare if you’re not completely familiar with the legal side of buying a home.
This is exactly why experts from Parramatta Conveyancing refer to the process of transferring the title of real property from a seller to a buyer as “conveyancing minefield”. And the best way to navigate this minefield is with the help of a licensed, trained, and qualified professional.
Conveyancing is not only time consuming, but also a rather complicated process that involves a lot of paperwork and specialist legal knowledge to handle it. A professional conveyancer will give you valuable advice about buying a new house, explain the confusing legal terminology, prepare necessary documentation, and oversee the entire buying process. This will leave you more free time to focus on your other duties and obligations as a buyer.
2. Borrowing too much
Not being realistic about how much you can borrow is one the most dangerous traps you can fall into as a first-time home buyer. Taking out a loan that you won’t be able to repay is the one regret you don’t want to have in your life. You may be tempted by low-interest rates and smooth-talking lenders to borrow more than you can realistically afford, so go over your financial priorities carefully and make sure don’t rush into anything until you’re complexly confident in your decision.
A good rule of thumb is that no more than 50% of your monthly income should go toward loans. This means you need to take into account all your other loan expenses before you decide on the amount for the home loan.
Don’t forget to pay close attention to the length of the loan tenure. Majority of first-time buyers think that a longer tenure is always better than a shorter one, but tenures longer than 10 years have a higher interest outgo, which means they can and will cost you more in the long-run.
3. Overlooking hidden expenses
It’s normal to be impatient when buying your first home. I know you can’t wait to get your hands on the keys of your new house, but in order to save yourself much trouble in the future, you need to take things slow and calculate all the expenses that come with becoming a new homeowner. As experienced home-owners know, buying a new place almost always ends up being more expensive than you predicted.
Just some of the often overlooked expenses include government tax, professional surveying, valuation fees, mortgage arrangement fees, and life insurance.
4. Skipping home inspection
A home inspection is an extremely important step when buying a new house and hiring a certified home inspector is an absolute must. Here’s why: a home inspector may determine that improvement and maintenance of your would-be home will cost you more than you can afford, which means you’ll have one last chance to back out of buying a house.
Without the assistance of a professional home inspection service, you won’t be able to get a clear picture of your new home’s condition. That house you’ve got your eyes on may look picture-perfect on the outside, but only a professional home inspector will be able to recognize hidden damage and structural faults.
A typical home inspection report will include the assessment of the structural components of the house, exterior features, the roof, electrical systems and plumbing, insulation, heating and cooling systems, and vents. For some home inspectors, measuring radon levels is also part of their home inspection process.
5. Being too picky
Finally, don’t forget the importance of being realistic. It’s only your first home so don’t be too picky and waste time your time looking for a house from your dreams.
Your first home doesn’t necessarily have to be your forever home, so forget about what you’ve seen on home improvement shows and look for a home that is not only aesthetically appealing but functional as well.
Trying to do handle the legalities of home buying without a professional conveyancer, taking a dangerously big loan, disregarding extra costs and home inspection, and expecting you get a dream home the first time around are five of the most common traps first time buyers fall into.
Not only can these mistakes ruin an otherwise joyous event, but they can also cost you a lot of money, so do your best to avoid them – and happy moving!