Common Costly Mistakes Done While Buying Property

Disclaimer:- Articles in this blog are just personal opinion of the author or authors.
It may or may not be correct. Pls do your own due diligence and pls seek professional advice according to your own personal circumstances.
The author or authors cannot be held responsible/liable for any contents in this blog.

Emotional buying
– People usually satisfy there immediate needs and fail to understand
that your first home is not your last home.
It is just a path to buy your next home. As tommorrow you will want to
buy another one.
– Therefore it is important to keep the purchase price under control.
– It is not ok to overpay because of the tile colors or because of the
color scheme.
– Location is equally important as it will help in capital gains in future.
– Failing to remind yourself that you are talking with a real estate
agent who has years of experience selling and negotiating properties
as compared to yourself.
– Fear of missing out is another emotional outburst.
– On the flip side, if you negotiate too much and offer low price or
extremely below market price, in that case also you are likely to miss
out on the property or land up making costly mistakes.

Not factoring in cost
– Not considering or undervaluing reno costs
– Not knowing about the stamp duty costs, building and pest costs,
strata reports, due diligence cost.
– Not factoring in cost of solicitor.
– Considering everything is free in the world.
– Cost to move.
– Electricity/water/council/strata costs
– Insurance costs
– Not considering that the mortgage interest rates can rise in future.

Stretching financially
– Buying purely due to emotions.
– Thinking only with heart and not head.
– Not considering all the costs as explained above
– Not having any budget
– Not having finance pre-approvals and assuming that it can be done in
the 5 day cooling period.
– Assuming that the bank is only working on your file during cooling
off and they don’t have any other work to do.
– Blaming everyone else in the world apart from yourself because
neither you had pre-approvals nor budget.
– Not having time to invest in relationships with real estate people
nor having a team of mortgage broker, solicitor, building inspection
guys.
– Not knowing your borrowing power and paying more than u can borrow.
– Not knowing that the bank will also do valuation on your purchase
and you have to pay/cover for the shortfall.
– Not having any buffer in place.
– Assuming that you have good friends and you can borrow from them if
required. That is one of the most important mistake people commit.

Due diligence
– Trying to save money on building and pest inspection which can be a
crucial part and should not have been missed.
– Trying to save money by hiring less competent or less experienced solicitor.
– Not getting contract reviewed at all by solicitor and signing without it.
– Not getting strata report prepared.
– Not making a few council enquiries for example checking any
development plans underway nearby, widening of roads, public housing
nearby.
– Not taking insurances.
– Not checking the zoning or development approvals on the property.
– Not checking whether the local school catchment maps.
– Not checking with neighbours as they usually have something hidden to tell.
– Assuming a lot of things and not getting points added in the contract.

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