Education & Training

10 COMMON MISTAKES FIRST HOME BUYERS MAKE

Russell Zayedi, Director

Simply Wealth

Are you looking at buying your first home now or in the future?

Please read carefully all the steps so that you can make a wise decision.

Mistakes First Home Buyers Make

  1. Buying emotionally – Your first home is not likely to be your last home, so it’s better not to get too emotionally invested in the process. Instead, think of it as an investment, and a stepping-stone to your next property. Keep it in mind that you are borrowing around 80% from the bank, so it is a big liability for you. With a proper planning you can turn your liability into an asset.
  2. Not factoring in all of the real costs – Everyone looks at the price of the property first, but it’s important not to let all of the other costs, like stamp duty, conveyancing, moving costs, rates and taxes and insurance and maintenance, body corporate fees, and mortgage fees get left out of the equation.
  3. Not understanding the building price or process– Most builders out there will show you the base price to attract your business. In most cases they do not add the site cost, government levies, driveway, landscaping, fencing and other important items like blinds, fry screen etc. that you need to have a complete house. For example, if the advertisement says a single-story house starts from $180,000 means it is not the complete price, you need to add another $50,000+ for all other charges and items and then your whole building price will be close to $260,000-280,000. If you do not understand the whole process, you might be in a big trouble to settle in the property.
  4. Overextending financially – A mortgage broker can help you navigate loans and work out a budget, so you do not end up taking on more than you can really afford. 
  5. Not doing your proper due diligence – Do not forget the seemingly little things like building and pest inspections. These can help you avoid potentially big problems down the road.
  6. Not understanding the contract, you are signing – Once you’ve signed a contract, you’re obligated to fulfill the terms, so it’s important to understand what you’re getting into. Your legal representative can help make sure that you are fully informed before signing on the dotted line.
  7. Not getting finance pre-approval – When you get your finances organized ahead of time and get a loan pre-approval, you’ll know exactly how much you have to spend and be at less risk of overextending yourself. 
  8. Trying to do it on your own or not having a mentor – Buyer’s agents, investment advisors, mortgage brokers, and solicitors are all examples of professionals whose expertise can help make sure that your buying process goes smoothly and you get what you want and understand what you’re getting. Do not try to go it alone. 
  9. Not planning ahead-Your first property will determine where you going to be in in next 5-10 years. What if in the area you are buying is not going up in value or what would you do if your interest rate goes up? What impact would it put in your life or in your finance in later stage? According to our research about 11% first home buys will sell their house less than 10 years or will go through massive financial stress due to not having a proper plan. Therefore, you should engage a mentor who helps you to understand the whole financial process and future outcome. Just do not listen to your friends and family, their intensions are obviously good, but they are not the experts.
  10. Not knowing when to buy-Most home buyers are confused when to buy and they do not understand that when they have a job and banks giving them money is the best time to buy. Property price between $400,000-$550,000 will never go down in value due to any circumstances. Currently Melbourne median price is $830,000. Any property above that price range may have been affected but not a house in an ideal location that you bought for $540,000. According to CoreLogic data between 1995-2017 Melbourne property price went up by 335%.
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EDUCATION & TRAINING

When beginning your property investment journey or even as an experienced investor, you should never stop educating yourself and building up your knowledge base. The key to success with anything in life is through learning about that topic and soaking up as much information as you can to gather confidence and certainty towards your goals.

The best source for education and training is to work with an industry expert or someone who has achieved what you want. Following that attend seminars, read books, magazines, blogs, forums, and online courses just to name a few. Achieving financial freedom through property investment to live a life without limitations is no different and should be considered a top priority.

After all, we need money to survive, it is like oxygen so it makes sense to understand how it works and to use the money to work for you. Remember money never sleeps!

At Simply Wealth, we believe education is key. So much so that we take the time to educate our clients to ensure that their decisions are backed by knowledge. Simply Wealth education initiatives include:

Delivering solutions that make personal sense. Not just financial sense.​

We are an elite team of property professionals who are full-time property investors with proven results. We also value an ethical approach when it comes to property investments, laying out all the considerations so that you have information beyond numbers when making decisions.

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