Purchasing a home is one of the biggest financial decisions you’ll make in your lifetime. With so much on the line, it’s important to avoid common mistakes that could impact your purchase. In this article, we’ll outline the seven most common mistakes made by homebuyers in Australia and provide tips to help you become a savvy buyer.

Mistake #1: Draggin’ Your feet with Offers

It’s common for newbies who are new to the house market to get a bit jittery when they’ve found a property they love and want to make an offer. But, hang on too long and ponder too much, and you’ll likely miss out on the chance to secure it. In this market, experienced buyers move fast to lock down the best properties.

Tip #1: Don’t be a Wally, Make the Offer

Here’s the thing, making an offer doesn’t mean you’re legally bound to it. You can make multiple offers on different properties and change your mind if you need to. So, don’t be afraid to put your best foot forward and make an offer as soon as you’ve had a chance to check the place out. After all, you never know, you could end up with your dream home!

Mistake #2: Seeking a Bargain

A lot of Aussies get a bit obsessed with getting a bargain when buying a property. Sure, who doesn’t love a good deal? But it’s important to keep in mind that the property market Down Under is hotter than a Summer day in Darwin. With new arrivals and savvy investors always on the hunt, it can be tough to score a real steal. Instead of fixating on the price tag, have a think about what the property is actually worth in the big picture.

Tip #2: Don’t just fixate on the price tag

Snagging a fantastic property is the real prize. Sure, getting a steal of a deal is always a bonus, but don’t let it be your only focus. Be willing to pay a bit extra for a property that ticks all your boxes and fits within your budget.

Imagine you’re in the market for a new home and you’ve come across two options. Both houses are priced at 500k, but there’s a catch. House A has a yearly growth rate of 5%, while House B has a growth rate of 3%. And, as if that wasn’t enough, House B also has a discount of 50k! So, which house should you choose?

Here’s a little tip, the choice between the two houses comes down to long-term benefits. Sure, House B has a 10k discount on the deposit, but in just one year, House A has already increased in value by 10k more than House B. And after 9 years, House A is worth 100k more than House B! As you can see from the table (Table1), House A is the clear winner when it comes to growth and return on investment.

	House A (Worth 500k)	House B (Worth 500k and can get at 450k)
Yearly growth rate	5%	3%
Deposit Required	100,000.00	90,000.00
Year0	500,000.00	500,000.00
Year1	525,000.00	515,000.00
Year2	551,250.00	530,450.00
Year3	578,812.50	546,363.50
Year4	607,753.13	562,754.41
Year5	638,140.78	579,637.04
Year6	670,047.82	597,026.15
Year7	703,550.21	614,936.93
Year8	738,727.72	633,385.04
Year9	775,664.11	652,386.59

So, what’s the bottom line? If you’re looking for a solid investment, go for House A. And remember, finding a good house is key, but if you can snag a good house at a good price, then you’ve hit the jackpot! But, don’t wait around for that perfect deal. Sometimes it’s worth paying a little extra to get the home of your dreams!

Mistake #3: Wait for a perfect house

Let’s face it, some of us can be a bit picky when it comes to buying a house. We want everything to be just perfect – location, size, decor, and the list goes on. But, here’s a little secret – there’s no such thing as a perfect property! Every home has its quirks, and it’s important to find one that ticks enough boxes for you and won’t blow your budget. The problem with waiting for Mr. or Mrs. Perfect is that you might miss out on a pretty good catch that comes along the way.

Tip #3: Don’t hold out for a flawless home

Don’t hold out for a flawless home. Instead, find a property that fits your needs and budget. Remember, there’s always room for upgrades and renovations down the road.

Mistake #4: Holding Out for a Price Dip

It’s tempting for some homebuyers to wait for a property’s price to decrease before making a purchase. But, it’s important to keep in mind that the real estate market in Australia is always evolving and there’s no assurance that the price of a property will actually drop. While you’re waiting, you may miss out on other attractive opportunities that arise..

Tip #4: Don’t wait for a price drop

Don’t wait for a price drop, focus on finding a property that satisfies your needs and fits within your budget.

Mistake #5: Going with your gut instead of your head

During the house hunting process, it’s easy to get frustrated and anxious, especially when prices keep climbing and your dream home seems out of reach. Some buyers might start making impulsive decisions, settling for a house that doesn’t meet their requirements or is in an undesirable location, like near a busy street or highway.

Tip #5: Stay calm and think things through

Smart buyers take their time and keep their cool. They know what they’re after and have a clear idea of what they’re willing to spend. When a good opportunity comes up, they do their research and make a well-informed offer. And if they miss out, they keep looking rather than making a hasty decision they’ll regret later.

When it comes to buying a home, it’s important to take your time and think things through. Don’t let emotions drive your decisions, and have patience – the right opportunity will come.

Mistake #6: Over-Emphasis on Interior Condition

Some homebuyers place too much importance on the internal condition of a property. For instance, if they see that a house is too dark or appears unclean, they quickly dismiss it from consideration. However, simple updates like cleaning or painting can greatly improve a home’s appearance. By focusing solely on the interior, they may miss out on a good deal.

Similarly, some buyers may be taken in by a property with beautiful decorations or recent renovations and end up paying an exorbitant amount, while disregarding crucial factors like the location, school district, or size of the land that cannot be changed after purchase.

Tip #6: Focus on the unchangeable conditions

Prioritise the Unalterable Factors Savvy homebuyers focus on the key aspects of buying a property – those that cannot be changed after the fact, such as neighbourhood, location, etc. They understand that anything inside the house can be altered through renovations or even a later tear-down and rebuild.

Mistake #7: Underestimating the Power of Other Offer Conditions

Many new buyers tend to focus solely on the price in the offer, disregarding the significance of other clauses. However, this limits their bargaining power and misses out on the opportunity to use other conditions in the offer to their advantage.

For instance, one time we made the highest offer on a property but lost out to another buyer who had made an unconditional offer. The seller was eager to sell the property quickly, so they went with the unconditional offer, even though our offer was higher.

Savvy buyers know that, in addition to price, there are other conditions in the offer that can be leveraged to get the best deal. For example, if a buyer is confident in their financials, they can waive the finance clause, which increases their chances of securing the property. Or, they can negotiate the settlement date to align with their own timeline and interests

Tip #7: Don’t overlook the other conditions in the offer.

Don’t overlook the other conditions in the offer. Use them to negotiate and secure the best deal for you.

Mistake #8: Skipping the building and pest inspection

It’s all too common for buyers to get caught up in the excitement of a potential new home and make an unconditional offer or go to an auction without bothering to check the building and pest report. Big mistake! This could lead to some serious heartache and a hefty repair bill if they find out the house has some structural problems down the track. Even seasoned buyers can fall into this trap, especially when the property market is hot and they’re eager to secure a house.

Tip #8: Always check the building and pest report

Unless you’re buying a house for the land value only, or you plan to knock it down, always make sure to get a building and pest inspection done before making an unconditional offer. Some houses may look solid on the outside, but could have hidden issues that require a professional inspector to uncover.

If you’re bidding at an auction, be cautious of properties without a building and pest report. Normally, auction houses will provide one to attract more buyers and get a better price. If a report isn’t available, there could be a reason, such as structural or termite problems. In this case, always get an inspection done before the auction. There have been plenty of instances where buyers didn’t do their due diligence and ended up bidding on a house with serious problems – and regretting it later.

Savvy buyers will always take the time and spend the money to check the building and pest report before making an unconditional offer or going to an auction.

Mistake #9: Skimping on Your Research

When it comes to buying a house, you want to make sure you’re making a wise investment. But sometimes, even the most well-intentioned buyers fall short in the research department.

For instance, imagine you find the perfect house, only to discover later that it’s in a flood zone. Not only will you have to pay high insurance fees, but you’ll also be stuck with a whole heap of headaches when the next big downpour hits.

Tip #9: Do Your Due Diligence

To avoid these kinds of mistakes, it’s crucial to do your research. When assessing a potential property, consider not just the house itself, but also the suburb, street, neighbourhood, school catchment, flood zone, bushfire risk, average house prices in the area, recently sold comparable properties, and the seller’s motivations for selling.

The savvy buyers don’t need to make each of these factors a deal breaker, but being aware of them will help you make an informed decision and maybe even snag a good deal.

So don’t cut corners when it comes to researching your future home. Take the time to thoroughly evaluate all elements of the property and make a confident, informed choice. That’s what the smart buyers do.

Summary

In conclusion, being aware of these common mistakes will give buyers the know-how to avoid them in the future and make informed decisions. By following the steps of savvy buyers, you’ll be on your way to finding your dream home in no time!

It’s also a good idea to consider hiring a professional buyer’s advocate to help guide you through the process. The sooner you find your perfect home, the more money you can save in the long run.