Buying that perfect first home in Brisbane is bound to be fraught with stress and difficulties if you jump in too quickly. Not only is it a time-consuming process, but also a process with tons of unwritten laws and little snags that can trip you up. Here we review the biggest first home buyer mistakes and tips on how to avoid them.
Getting Stuck In “Analysis Paralysis”
All that chatter about the numbers and the market can be confusing and misleading. If you try to get caught up in too much analysis you can end up with what we call “analysis paralysis”. Suddenly your brain is overwhelmed by too much information – and it’s often information you don’t really understand. Knowing when or when not to buy is not always as important as your reasons for buying. This is one of the biggest first home buyer mistakes because you can’t let the market influence your decisions.
When you’ve decided you want to invest in property, then that tends to be the right time for you. Yes, prices go up and down, but if you set a budget and find your ideal home with the help of a professional, the ‘when’ is not so important. Buying a home needs to focus on your longer-term goals, so really can’t be based on short-term conditions in the real estate market. They will always change. The truth is that for the most part the real estate market tends to head ever upward, so if you’re thinking of buying now, then now is when you should make your move.
Feeling Like You Have To Go It Alone
The first mistake brings us to this very important second first home buyer’s mistake: trying to go it alone. The only thing you really need to know is a buyers agent is your best tool when it comes to buying a home in Brisbane. Nothing could be simpler. We’ll work together to secure your dream home, and ensure you acquire your home for the best possible price and terms. You see, part of the issue of going it alone, your lack of experience aside, is that you miss out on opportunities.
For example, a friend might warn you off living in a certain area based on a rumour, or their own bad experiences. However, things change and what they experienced, which by the way is very personal and can’t apply to everyone, could be completely a thing of the past. As well, we have access to something called off-market properties that you’d never see if you didn’t work with us. We guide you not because we want to make money, but because we have a duty to represent you, find you the best home and negotiate so you get the best terms. It really can be that simple. In many cases, our fees are offset by the amount we save you on the purchase price as a result of the experience and negotiation skills we’re bringing to the table.
Not Having a Plan
So, your plan is to buy a home? That’s really not quite a plan. Ask yourself some questions about your goals:
- Are you looking for a long-term home or something to get your foot on the lower rungs of the real estate ladder?
- Are you trying to improve your quality of life, so you are closer to the things that mean the most to you, or do you want to stay where you are in Brisbane?
- Is now the time to buy because you are sick of paying rent and want to invest in something you can own, or did you just realize rent and mortgage payments come out to about the same?
- Is it just you, or should you make room for a partner, potential for a family?
- Is this purchase first and foremost a home, or does the investment side have much to do with it?
All of these things will help you formulate a plan to help you meet your first home goals.
Not Understanding Property Values
Property values aren’t as easy as you think. When you don’t understand property values, you miss out on up to the minute data insight and local market knowledge that lies in between the lines of paper reports. It comes back to analysis paralysis and going it alone. When you work with a team that has inspected properties with the knowledge to compare them on size, space, aspect, views, condition, and other features you begin to see the value.
Value also fluctuates between every street in Brisbane. Understanding value and how it fits into the competitive scenario surrounding the property takes years of inside knowledge. That knowledge is what keeps us one step ahead of the competition. Some factors we consider when placing an offer for you are:
- Supply and demand: The more houses on the market, the better it is for the buyer, as you have many options to choose from. The less houses on the market, the better for the seller, as more buyers are fighting over the limited listings available.
- Higher incomes: The higher the incomes in an area, the more money people have to spend, and the more households who have the capacity to afford to buy property. This can drive prices up, and even affect supply.
- Interest rates: The lower the interest rates, the more accessible home ownership becomes because it increases how much you can borrow towards your purchase.
- Household size: Less Aussies are having kids, and also those having kids are having fewer. In fact, less people are partnering up. These things contribute to higher demand for smaller homes.
- Average Rent: When rents are high, the monthly cost becomes closer or even lower to a mortgage, so ownership becomes more popular.
- Tax Incentives: Things like discounts on capital gains and negative gearing for owner-occupied housing attracts more investors to the real estate market.
Because it’s impossible for first home buyers to grasp all of these factors that take years to interpret, it really does make sense to have a professional in your corner.
Not Knowing a Good Price when You See It
In Brisbane today, there are negatives and positives adding to property prices. For example, Brisbane is undergoing a lot of infrastructure improvements including highway and airport upgrades and new entertainment complexes. This draws people to the area, both to live and to invest. Knowing when something is priced well or not is all about dollars and cents. We do consider value, but it’s more about what the market will bear in any given area or even on any given street.
When you don’t understand pricing, you could end up paying way too much for a home, which in turn affects the equity you can build up. You want to ensure you pay as low (or fair) a price as possible as you see instant equity. Should you need to sell, you will at least see your down payment and some possible profits returned. However, if you overpay, you end up having to hold onto your home longer because you could end up losing money.