Buying a house is one of the major life decisions most of us come to make at one point or another. It can be a strategic decision, as part of your long-term financial plan, but for most of us let’s face it – it’s emotional. Maybe you just got married, or you’re expecting a child; you have established a good career and can finally afford to buy a place of your own. These emotional starting points can cloud our judgement somewhat when buying a house for the first time and result in some of the classic mistakes many first time buyers make. So much so that we can overlook key things that, if we had known about them before buying, may have affected our choice to buy that particular property.
1. The realities of that ‘great’ location
Many a new home owner has made the mistake of not spending enough time around the property before deciding to buy it. This means going there on different days of the week and at different times of day. School drop off times are a must, as is later in the evening around 9 or 10 and maybe even a Saturday night. Grab a coffee and the paper and sit in the car for an hour or so, just listening to the sounds of the street. This may seem overly cautious but this could be when you discover things that a 30 minute weekend inspection may not have revealed like flight paths, public transport and peak hour ‘rat runs’. You might have missed the traffic chaos that happens every day as people pick up their kids from the family day care facility two doors down, or on Saturdays when everybody uses that street as the detour to the local sporting fields. You won’t realise that the cute corner pub that you were charmed by, is actually a breeding ground for obnoxious drunks on weekends, or that it’s actually the central meeting point for all the uni students that live in the area, making your suburb party central. These and many more issues can seriously impact not only on your lifestyle, but the resale value of your home in the future.
2. The neighbours are actually from hell
If you plan to live in this house for a long time, or even if you want happy tenants to live there, it’s well worth knocking on the neighbour’s doors before you buy, to ask what the local area is like. Not only do you get a sense of who the neighbours and what it might be like to live next door to them, you will get some real time, hopefully honest information about the realities of the neighbourhood. Sometimes it only takes a knock on the door – a greeting by deep raucous barking from their beloved Great Danes, will tell you a lot. They may invite you in for a cup of tea or a glass of wine, or peer suspiciously at your through a crack in the door. If they let you in, ask them things like how long they have lived there for, what their hobbies are, how well they know the other neighbours or other people in the street. You don’t have to get on with neighbours all of the time of course, but at least if you meet them, you can put some expectations in place. You may decide to buy the house anyway, but getting some local intelligence before you move in can make all the difference. You’ll either be dropping off freshly baked cookies once you’re settled, or buying a large guard dog.
3. The devil is in the detail
Urgh the paperwork! There’s so much of it and it’s so boring – you don’t even understand half of it because it’s in dull complicated industry jargon. Why not just sign the thing so you can get on with your exciting new life in your shiny new home? Because the devil is in the detail, which is usually in the fine print. There are plenty of small details you might miss, that can come back to haunt you when you try to make plans later. Property owners sometimes only discover the actual boundaries of their property when someone wants to add an extension onto their house. It can be an expensive truth to learn that your fence is actually sequestering 5 inches of your neighbour’s land. But then there are also rights of way to consider too. If your future property is subject to a right of way, it could mean your neighbour has legal rights to cross parts of your property at anytime they choose. And… what about sewerage or drainage easements? They can significantly affect what you can and can’t do with the property. If you’re buying into an apartment building there will be important information about Owners Corporation requirements, owner responsibilities and use and care of communal facilities (including which ones are actually communal). If you bought property with land that you have big subdivision dreams about, you should definitely be sure the local zoning rules will accommodate for your plans into the future.
4. The actual amount of work that fixer upper needed
Many of us have dreams of buying a charming old home and lovingly restoring it to its historic glory. However, if you are a DIY renovator, don’t overestimate your skills, or underestimate the work that will be involved. Get a building inspection before you buy to truly understand the condition of the property and what foundation work will need to be done, just to keep it standing. The structural integrity of the home is your first priority, along with repairing the roof and windows and making sure it is draft free and water tight. After that (which could take months) you can start to day dream about paint colours, sanding back architraves and decorative features and replacing tiles, fittings and fixtures. Make sure to not let romance win out over reality - a rambling ‘romantic’ garden can become a curse as you wage a never-ending war against dangerously rotten trees that could fall in the next high wind, blackberry bushes, ivy, possums and rats. It’s true the fireplace IS gorgeous and there is nothing quite like the atmosphere of a roaring fire. But first you have to get the decades of soot and dead animals out of the chimney, not to mention consideration of the ongoing cost of burning firewood, both environmental and financially. With Terrace Houses, people sometimes find that their gorgeous fireplaces can’t actually be used because when the neighbours converted their attic, they removed the jointly shared chimney brickwork that was robbing so much space. With historic renovations, the reality is more often than not, much less romantic than your expectations might have you believe.
5. The truth about the market
The biggest mistake many first-time buyers make is not researching the market well enough before buying. The classic is buyers who buy for now and don’t think about the future. It’s essential to get advice from local real estate agents or property developers, to do some background reading on the area and to even check in with the local council about what developments are currently underway or whether anyone is trying to re-zone. They can usually give you information about time frames, zoning in your district and around your property and things that have recently been approved (such as a 5-storey car park that might soon become your new view and block all of your afternoon sunlight). Don’t buy on a rumour of a new shopping centre, train station, airport or housing estate – make an informed decision based on extensive research others will already have done. The local market will only improve based on actual investment in the area, not talk of it.
In addition, get as much advice as you can about the local property market and what it has been doing over the last year, the past 5 years and the past decade. You don’t want to buy in at a great price now, only to see the property become much less desirable, due to circumstances you hadn’t properly researched before buying. Don’t forget to check information about local crime rates as well. Knowing you are buying into a stable market that has had consistently good growth will help, but that information will also inform any projections you get about the potential future of the market too. Remember you can never have too much advice from those who know what they are doing. Speak to your local real estate professional and get a second or even third opinion if necessary.
DISCLAIMER: The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.