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Booms, busts, and bubbles – over time the language of property buying can really start to sound like juvenile gibberish. If you are new to the property game and looking to buy your first home, try not to let it overwhelm you. The best thing you can do to make well-informed decisions about this life-long asset is to read and know your stuff before you sign any contracts. Here are five tips for first home buyers in Australia:
1. Chat with an advisor
Once it’s out in the open amongst your peers and friends that you are shopping for a property, you are going to get so much well-intentioned (but annoying) unsolicited advice. The only way to avoid confusion is to get your big questions answered by a professional.
When it comes to finding property investment advice, Melbourne is not short of knowledgeable consultants who use their expertise to guide first-home buyers through their options and the overall process. All you need to do is reach out to them.
2. Think long term
If you are buying a home to live in, always consider your long-term needs and goals when looking at potential properties. Are you a growing family who will need an extra bedroom in a year or two? Are you getting a car in the future that will require secure parking? Do you need extra space for potential home improvements like a pool? Are you likely to get tired of its noisy position near a freeway? Ask yourself questions like this to get an understanding of what you need in a home beyond this year.
3. Be patient
This is one of the biggest purchases people make, so it pays to take your time in making this financial decision. When shopping around for your first home, you will learn a lot about the market and your wants and needs.
As you come to understand the process and explore more property options, you will likely end up choosing a different type of property than you originally imagined. Time and knowledge are your best defences against making a poorly thought out, emotion-based decision.
4. Don’t be tempted to spend more than you can afford
More often than not, a house you can comfortably afford is not going to align with the maximum lending amount you are pre-approved for. While it’s exciting to hear these big numbers and visualise yourself living in a higher value home, it’s important to remain pragmatic with your spending.
Overspending is an issue that often gets first-home buyers into financial trouble. Focus on knowing what you can afford by taking into account the prospective monthly expenses of a property, including mortgage repayments, bills, and fees. Next, make sure you can afford the whole package at your income level.
5. Listen to your gut instincts
If it’s day one of property inspections and you haven’t done much research yet or practised the above tips but your head keeps telling you “make an offer” – ignore this tip! That’s your excitement talking. You need to be reasonable throughout this process. If, however, you do come across a situation where your gut feeling tells you something is off, pay attention to it and look out for red flags. This is where you will be living your life, so you should do every check you need to feel safe and comfortable.
Homeownership is not known to be a smooth-sailing journey, but if you take your time and keep the above points in mind, you can be confident in the choices you make.