Purchasing a home is a big deal, and it can be a bit overwhelming. The last thing you want is to make costly mistakes that can haunt you in the future.

As Buyer’s Agents, it’s our job to help our clients avoid mistakes on their homebuying journey.

Mistakes buyers make when purchasing

Here’s a list of 25 avoidable mistakes that buyers can make:

1. Ignoring the Budget Basics: One big mistake is not setting a budget. If you don't know how much you can spend, you can waste months house-hunting in a price range you can’t actually afford. Getting a fully-assessed pre-approval is the best way to understand your actual borrowing capacity.
2. Skipping Pre-Approval: Before you even start looking at homes, get yourself pre-approved for a mortgage. It’s best to understand what you can afford before you start shopping around for a home. Keep in mind that homes often sell for above their advertised price, and closing costs can add another 5-10% on that figure! Your deposit needs to cover your portion of the purchase price to get the LVR to where you want it to be, but then also is needed to pay 100% of closing costs.
3. Revealing too much to Sales Agents. A Sales Agent (real estate agent) represents the seller, not the buyer. They have a fiduciary duty to obtain the highest possible price from the buyer. Buyers often reveal too much to the Sales Agent, placing them at a disadvantage during negotiation. The agent needs to know you’re interested, but don’t tell them you’ve been looking for 6 months, are in love with the home, and your best friend lives around the corner!
4. Not researching the Neighbourhood: Don't just focus on the house; pay attention to the neighbourhood too. Check out the streetscape, schools, and whether there's a decent coffee shop nearby. Your location can make or break not only your happiness, but the future value of the property. With a suburb, each street can have wildly different values. Train, road and aircraft noise, local traffic congestion and the quality of neighbouring homes all have a dramatic impact on property prices. A large portion of the value of a property is in the land, not the actual house.
5. Not building the right team: Picking the right “purchasing team” is crucial to avoiding unnecessary expenses and disappointment. A buyer typically needs at minimum a mortgage broker and a conveyancer. It’s becoming very common to engage an independent Buyers Agent too. Take advice from educated, recommended and qualified property professionals to avoid making mistakes that can cost you dearly, either now or down the track.
6. Skipping the home inspection: The home and pest inspection report is your backstage pass to see what's really going on with the property. Skipping it or ignoring its findings is like buying a mystery box; you never know what you're getting into. Proper due diligence from a Buyers Agent is also highly recommended, as it investigates totally different things compared to a building and pest report.  
7. Short-Term Thinking: You really do need to think about the long-term! If you're planning to start a family or work from home, a studio apartment might not cut it. Fixed purchase and sale costs mean you’re probably better of renting if you need to sell a property within 5-8 years of owning it. Plan for the future; don't just buy what suits you right now.
8. Rushing the Decision: Buying a home is not like grabbing a candy bar at the grocery store checkout. Don't rush into it. Take your time to explore different properties and weigh the pros and cons. It can often take several months to find a suitable home. Settle in for the journey and take your time with this important decision. When hiring a Buyers Agent, be sure they’re willing to work at your pace.
9. Offering too much and overpaying: It can be difficult to know much how to offer during a private negotiation. Often there is no advertised price, or that price isn’t very accurate of the market demand anyway. It’s best to seek professional advice from a Buyers Agent to understand the likely market price of the property, and have a strategy for how to secure it at Auction or during a private sale. It’s very easy to unknowingly offer $30,000 above the next closest buyer. Over a 30 year mortgage, that’s actually more like $60,000 when you factor in interest. For you to have $60,000 in your pocket, with normal tax rates, you probably need to earn $80,000 before tax. An experienced sales agent can easily draw another $30,000 out of an inexperienced negotiator, and that simple error can cost you $80,000 of earnings when you actually do the sums!
10. Underestimating the Costs: Owning a home is not just about the mortgage. There are taxes, insurance, maintenance, and surprise expenses. Be prepared for the whole shebang, and understand your financial situation before you make big decisions. Ownership is commonly much more expensive than rent.
11. Weak Negotiation Game: If you're not a good negotiator, it's time to learn or hire a Buyers Agent. Negotiating effectively means you have a chance of winning the property and paying a fair price. Poor negotiation means you won’t secure your dream home, or you’ll end up paying well above a fair price. Sales Agents are well-paid, highly experienced negotiators that are legally required by a duty to the seller to extract every single dollar out of a buyer.
12. Ignoring the Fine Print: Reading contracts and loan terms can be about as fun as watching paint dry, but it's essential. You need to understand all the nitty-gritty details; otherwise, you might get caught in a tangled web of obligations or expenses.
13. Emotion-Driven Decisions: Falling in love with a house is fantastic, but don't let those feelings blind you. It's a financial commitment too, so balance the heart with the head.
14. Overlooking the Resale Value: You might not be thinking about selling your new home yet, but you should. Consider how the property's value might change over time. If the home isn’t in a desirable area now, will that change in future? Can fundamental issues be repaired? It’s rare to find a ‘great deal’, or buy ‘under market value’. Does the price seem low? Perhaps there something fundamentally wrong with the house that you’re missing.
15. Inadequate Research: Visit the neighbourhood at different times of day and week to get a true feel for it. Talk to potential neighbours to gather insights. A Buyer’s Agent will provide a comprehensive due diligence report for you that’s completely separate to the Building and Pest Inspection. The more you know, the better.
16. Not Considering Commute Time: The dream home might be far from work, school, or your favourite hangouts. Long commutes are an important factor in your lifestyle.
17. Being Unrealistic: Don't expect to find a perfect home with zero flaws. Be willing to compromise on some aspects, but never compromise on what matters most to you. Small things you don’t like can easily be improved quickly and affordably. Size, number of rooms and good flow to the floor plan is much more critical than floor coverings or paint color.
18. Taking advice from family and friends: Although they mean well, unless they are an active property professional, their advice is likely outdated, misinformed or too unique to their personal experiences. Use professionals such as a Buyer’s Agent to receive educated, factual advice; based on data and current property metrics.
19. Getting too attached to one property: As soon as your dream home comes on the market, hopefully you can secure it quickly and at a reasonable price. However, things might not work that smoothly, so it’s important to enter the property hunt knowing it can be competitive and frustrating. You may miss a few homes, and things might cost more than you first intended.
20. Overlooking age and condition, or undervaluing renovations: Older home usually cost more to maintain, and can have expensive surprise costs appear at any time. The charm and character of these homes is desirable, but it’s important to budget for additional expenses. Additionally, don’t underestimate the value of a completed renovation on a home you’re considering – it likely cost more than you think, and the work is already done for you. If you don’t have to pay for renovations in the future, then you should consider spending more now on a home that’s been recently renovated. If buying a fixer-upper, allow the renovations to cost 20-30% more than you originally estimate, and then compare with a home that’s already renovated.
21. Overconfidence. It’s important to remain humble and level-headed in negotiations. Don’t assume you know more than other people, or overestimate your abilities.
22. Buying before auction. If an agent has suggested you offer before auction, be very careful. Some agents convince buyers to make pre-auction offers when they actually only have a single real buyer. They are in danger of overpaying because there isn’t actually any other competition, but the agent can certainly make it feel like there is!
23. Just offering 5-10% more than the agent's asking price. This approach assumes the agent’s asking price was an accurate and educated opinion on the potential market price of a property. Buyers regularly overpay when they simply take the agents price guide to be gospel, and then offer slightly more. ‘Advertised price’ is tricky in real estate, so it’s best to seek professional guidance from a Buyer’s Agent. Auctions price guides are often underestimated by the Sales Agent to attract more bidders from the market. For Sale advertised prices can be overestimated as a negotiation tactic called Anchoring – you don’t need to offer what the agent is asking. Do you own research, or hire an independent Buyer’s Agent.
24. Fear of missing out. FOMO can set in when you’ve found your dream property, but you start to feel nervous that someone else will take it from you! FOMO causes people to pay more than a fair market price, and Sales Agents are trained professionals at getting the highest possible price from buyers. A Buyer’s Agent is a voice of reason is this situation, and can help you understand a fair price, and how long you might need to wait before another similar property comes to market.
25. Confused by price inconsistencies. Property is all about people. There’s a seller, a buyer and agents – each with their own emotions and price expectations. Add to this, that properties are often difficult to directly compare. It can become complex to estimate a fair market price on a property you love with such dramatic price inconsistencies on previously sold homes. If you’re struggling to understand value, ask for help from a Buyer’s Agent.

So there you have it, a comprehensive guide to avoiding the most common mistakes when buying a home. Remember, it's a journey, not a sprint. Take your time, do your homework, and you'll be on your way to home sweet home!