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 Buying
a home can be one of the most exciting and rewarding times of your
life. Or it can be a roller-coaster ride of financial and emotional
devastation. It depends on what you do. And what you do, depends
on what you know. Most homebuyers do not have enough accurate knowledge.
Worse, many are ill-informed.
This booklet lists 13 of the worst mistakes made by homebuyers.
It suggests, briefly, how to avoid these mistakes so that buying
a home will indeed be an exciting and rewarding experience.
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for a FREE Copy here
WORST MISTAKE #1:
Exceeding Your Future Financial Limits
Financial stress is horrific. It tears families apart. The most
important financial question to ask yourself, before you buy a home,
is: "What’s the worst that can happen?" What if
interest rates rise? What happens if you buy based on two incomes
and you lose one income? Think of the future. Your financial limit
today will rarely be the same as your financial limit in the future.
Sure, it might be better. But what if it’s not? What if things
get worse? Play it safe. Make sure that when you buy a home, you
will be able to keep your  home.
WORST MISTAKE #2:
Buying What You Want Instead of What You Need
There are TWO kinds of buyers: Those who buy what they want, and
those who buy what they need. The public world of materialism is
often a private world of financial stress. Do you need four or five
bedrooms? Do you need to live in the "best" area? You
can buy a better home in a less expensive – and less prestigious
– area. What’s more important – struggling to
maintain an image of wealth or living safely within your means?
Most buyers could save tens, even hundreds, of thousands of dollars
by buying what they need instead of what they want. Think about
it.
Be careful.
WORST MISTAKE #3:
Ignoring the Extra Costs and the Hidden Costs
The extra costs of buying a home can add as much as ten percent
to your purchase price. In some States, the government stamp duty
climbs as high as six percent of the price. Will you need money
for inclusions for your home, items such as carpets and curtains?
And then there are the hidden costs of ownership – rates,
taxes, insurance and maintenance. These can add up to thousands
of dollars – all of which are constant costs. The price you
pay for your home is not your final cost, it’s the first of
many costs. Know what they are and make sure you can afford
them.
WORST MISTAKE #4:
Failing to Research the Area
There are few things worse than discovering, after you have bought,
that you could have bought better. If you intend to live in your
home for many years, take some time to check out the area before
you buy. Visit the area and make sure you like it. Check the prices
of recent sales in the area. When you find the home you love, don’t
be shy about inspecting it more than once. The more you see a home
before you buy it, the more you’ll know if it’s the
right home for you. And, finally, check out the neighbours. Research
is always time and money well
spent.
WORST MISTAKE #5:
Tolerating Poor Service from agents
Before you find the right home, find the right agent – one
who will listen to you and one who is prepared to help you find
the right home. Sure, agents are paid by sellers, but this is no
excuse for the widespread apathy, deceit and rudeness shown towards
buyers. All agents are not the same. Try to find one who will sit
down and discuss your needs with you. It is a mistake to think that
you have to tolerate poor service. An agent who is courteous and
caring will make all the difference
to you.
WORST MISTAKE #6:
Taking the Bait About the Quoted Price
One of the most unethical tricks in real estate is advertising
a home at a price well below its real price. Thousands of buyers
get their hopes up, only to discover that the home they love was
never in their price range. Advertisements which say "price
range" or "offers above" or "bidding to start
from" are usually misleading. The agents will use the excuse
of the "market" to cover their lies. Be very careful –
financially and emotionally – when you see "quotes"
about likely selling prices. Most times, it’s just a bait
to lure you. Take the bait and you’ll almost certainly get
hurt in one way or
another.
WORST MISTAKE #7:
Losing Money with Auctions
While you can often buy at a lower price with auctions, your challenge
is discovering the truth about the likely selling price. At auctions,
thousands of home buyers lose money through legal and inspection
costs for homes they never had a chance of buying. When they realise
they have been tricked it breaks their hearts. Auctions can be deceitful
and cruel. Unless you know what you are doing, it may be best to
do what many buyers do – forget about buying at auction. If
you must bid at auction, learn the "7 Rules of Buying at Auction"
– (see page 38 of the book, Real Estate Mistakes, available
in most bookshops).
WORST MISTAKE #8:
Being Unprepared for Gazumping
Sometimes after you make an offer and it is verbally "accepted",
another buyer will offer more. No matter what you are told, you
have never legally purchased a home until both you and the owner
sign a legally binding contract. Until this happens, remember five
words: Don’t Get Your Hopes Up. One way to reduce the risk
of being gazumped is to meet the owners. At the very least, ask
the agent to confirm that should another buyer make an offer higher
than yours, you will be given the chance to increase your offer
before the home is sold to the
other buyer.
WORST MISTAKE #9:
Being Too "Clever" With an Offer
If you decide to make an offer for a home you like, be aware that
the lower your offer the less chance you will have of buying the
home. Often it is best to make one offer – your best offer.
Make it in writing and state that you either can not or will not
pay any more. Be careful playing the ‘bluffing’ game,
it can easily backfire on you. Decide which is more important –
the home you love or the price you will pay. You don’t have
to pay more than you can afford, just don’t be too clever
or else you may miss the chance to buy the home you
love.
WORST MISTAKE #10:
Not Getting INDEPENDENT Inspections and Advice
It is essential – for your financial and emotional safety
– that you obtain an independent building inspection report.
Be sure you discover any major faults before you buy the home. The
biggest word to remember is the word "INDEPENDENT". Be
careful using anyone recommended by the agent. Some agents receive
kickbacks from advisors they recommend. Also, be sure to get legal
advice before you sign anything. It is madness to make one of the
biggest financial decisions of your life without independent advice.
If in doubt about the price, consider obtaining a valuation. The
hundreds of dollars you spend could easily save you thousands of
dollars.
Spend it.
WORST MISTAKE #11:
Being Too Quick or Being Too Slow
The right time to buy a home is when you find the right home at
a price you can afford. This can happen on the first day you start
looking or it can take weeks, even months, of painstaking effort.
Don’t hesitate to buy if you find the right home; but, also,
don’t be pushed into making a hasty decision. No matter what
you might think, you will always find another home. Take the time
to make sure everything feels right and that everything checks out
right. Whenever this happens, be it on the first day or after several
weeks, it is then the right time to
buy.
WORST MISTAKE #12:
Being Caught By an Investment Scam
Despite all the negative publicity, thousands of consumers are
caught with investment scams. Be very wary of "free" offers,
such as investment seminars or trips to inspect property in distant
areas. No matter how good these offers seem, many are a nasty con
where consumers are tricked into buying properties at hugely inflated
prices. Often, it is not until they try to sell that they discover
how badly they have been duped. Be wary of anyone who is trying
to sell you something because it is a "good investment"
or it has "tax benefits" or a "guarantee". Do
your research and don’t sign anything without getting
independent advice.
WORST MISTAKE #13:
Failing to Complain
If you have a bad real estate experience you must complain. Often
the louder you complain the more chance you will have of being compensated.
At the very least, you will be helping other buyers to avoid making
the same mistakes. Remember, too, that real estate institutes represent
real estate agents not consumers. Complain to your lawyer or to
the Department
of Fair Trading or the ACCC.
If you wish to tell your story, please contact
us. We will do our best to
help you.
 Read
the seven rules for buying at auction...
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