10 common first home buyer mistakes and how to avoid them

Buying your first home means making a lot of decisions you have probably never had to make before.

There is finance to organise, locations to compare, contracts to understand and a surprising number of things that may or may not be included in the price.

You are not expected to know all of it from day one. But knowing where first home buyers commonly get caught out can make the whole process a lot easier.

Here are 10 first home buyer mistakes worth avoiding.

1. Treating your maximum borrowing capacity as your budget

There is a difference between what a lender may be willing to lend you and what you are comfortable paying back.

It is easy to start with the biggest number on your pre-approval and work backwards. Instead, think about what your repayments would mean for the rest of your life.

Consider:

How to avoid it: Work out your comfortable monthly repayment first, then use that to help set your home budget.

2. Assuming you need a 20% deposit and not checking what help is available

A 20% deposit can help you avoid Lenders Mortgage Insurance, but it is not the only way to buy your first home.

Depending on where you live and your circumstances, you may be eligible for things like:

The rules and thresholds can change, so something a friend qualified for a few years ago might not be the same today.

How to avoid it: Check which grants, schemes and concessions you may be eligible for before deciding how much you need to save.

3. Thinking pre-approval means your loan is guaranteed

Pre-approval is useful because it gives you an indication of what a lender may be prepared to lend.

But it is not the same as final approval.

Your lender will generally still need to assess the property and confirm your financial circumstances before formally approving the loan.

Another easy mistake is changing your finances after getting pre-approval.

Taking out a car loan, increasing a credit card limit or making another significant financial commitment could affect your application.

How to avoid it: Keep your broker or lender in the loop before making significant financial changes between pre-approval and settlement.

4. Comparing advertised prices instead of what you actually get

A cheaper home is not always the cheaper home.

Builders can include very different things in their advertised or base prices, which makes comparing two homes based on one number difficult.

Depending on the builder and home, check things like:

Ask one very useful question

What isn’t included?

Then compare the answer, not just the number at the top of the quote.

5. Choosing land without checking whether it works for your home

Finding a block in the right location is only part of choosing land.

The block itself can affect which homes will fit and what it may cost to build.

Things worth checking can include:

A block that initially appears cheaper can become less appealing if the site needs additional work or limits the home you can build.

How to avoid it: If you already have a home design in mind, have the builder check the block before committing. If you are starting with the land, make sure you understand what you can realistically build there.

6. Assuming the display home is what comes standard

Display homes are there to show what is possible.

That can mean the home you walk through includes upgrades, different finishes or optional features that are not part of the standard home price.

That freestanding bath or upgraded flooring might be standard.

Or it might not.

How to avoid it: When you visit a display home, ask the consultant to clearly explain:

A good builder should make that easy to understand.

7. Choosing a builder based on price or floorplan alone

Of course the design and price matter.

But you are also choosing the company that will actually build your home.

Look beyond the floorplan and consider:

How to avoid it: Compare builders, not just houses.

Price matters, but so does everything that happens between signing your contract and getting the keys.

8. Signing something you do not fully understand

Building and property contracts are not exactly light reading.

But this is not the time to scroll to the bottom and hope for the best.

Before signing, understand:

How to avoid it: Have your solicitor or conveyancer review the relevant contracts and ask questions about anything you do not understand.

There are no bonus points for pretending you know what a clause means.

If something does not make sense, ask until it does.

9. Spending every dollar getting into the home

Your deposit and purchase price are not necessarily the last things you will pay for.

Depending on what is included with your home, you may still need money for things like:

And then normal life keeps happening too.

How to avoid it: Keep some breathing room in your budget rather than planning to reach settlement with exactly $0 left over.

10. Rushing because you’ve found “the one”

Finding a home, floorplan or block you love is exciting.

It can also make it tempting to move faster than you normally would.

Before committing, give yourself enough time to check the less exciting things too.

Ask:

How to avoid it: Get excited, but keep doing the boring checks.

A home can feel right and still need proper due diligence.

Mistakes happen. Surprises don’t have to.

You will probably change your mind about a floorplan, spend too long choosing colours and Google at least one property term at 11 pm.

That is all part of buying your first home.

The goal is not to know everything before you start. It is to understand the big decisions, ask plenty of questions and have the right people helping you along the way.

At Mayde, first home buyers are kind of our thing. We keep the process straightforward, explain what you are signing up for and help you work through the next step when you get there.