1. EXCEEDING YOUR FUTURE FINANCE LIMITS
Financial stress tears families apart. The most important financial question to ask yourself before you buy is: “What’s the worst that can happen?” What if interest rates rise? What if you buy based on two incomes and you lose one? Your financial limit today will rarely be the same as in the future. Sure, it might be better. But what if it’s not? Play it safe. Ensure when you buy a home you’ll be able to keep it.
2. BUYING WHAT’S WANTED, NOT WHAT’S NEEDED
Some buy what they want, some buy what they need. Public materialism is often private financial stress. Do you need four or five bedrooms? Do you need to live in the “best” area? What’s more important – struggling to maintain an image of wealth or living within your means? Most buyers could save tens, even hundreds, of thousands of dollars by buying what they need, not what they want. Think about it. Be careful.
3. IGNORING THE EXTRA AND HIDDEN COSTS
Your financial limit today will rarely be the same as in the future. Sure, it might be better. But what if it’s not? Ensure when you buy a home you’ll be able to keep it.NEIL JENMAN
Extra costs can add as much as 10 per cent to your purchase price. In some states, government stamp duty climbs as high as 6 per cent of the price. Will you need money for inclusions, such as carpets and curtains? And there are hidden costs – rates, taxes, insurance and maintenance. These can add up to thousands – and they’re constant costs. The price you pay for your home isn’t your final cost, it’s the first of many costs. Know what they are and ensure you can afford them.
4. NOT RESEARCHING THE AREA FIRST
There are few things worse than learning you could’ve bought better after you’ve bought. If you intend to live in your home for many years, take some time to check out the area. Visit and make sure you like it. Check the prices of recent sales there. When you find the home you love inspect it more than once. The more you see a home the more you’ll know if it’s right. And check out the neighbours. Research is always time and money well spent.
- Hear Neil Jenman at Homeland Real Estate’s consumer information and careers session at Liverpool Catholic Club, on Monday, February 18, 6pm to 8.30pm. Free, but bookings essential: 9600 7177 or homeland.com.au.