A mortgage broker has revealed the five things home buyers should know before securing their first property.
Joshua Vecchio, director of Brisbane firm Hunter Galloway, said his many errors while searching for his first home cost him $5,000 and 12 months of his life.
Now the home loan expert is sharing his top tips on how to create a smooth home-buying process to help others avoid the same pitfalls.
Joshua Vecchio, the director of Brisbane-based mortgage and home loan broker company Hunter Galloway, has shared the five things first home buyers should know before buying a property
Mr Vecchio said the first mistake to avoid when searching for a property is casting your net too wide.
‘Searching for my home in 2013, I thought my property brief was simple. [But] I had champagne taste on a beer budget,’ Mr Vecchio said in a video posted online.
‘It had to be less than $350,000 and had to be a house. It had to be close to the city. Each Saturday I was travelling half the way across Brisbane attending numerous open homes.’
Mr Vecchio said having a large search criteria left him with a long list of potential homes, leaving him with little time to thoroughly check out properties as he rushed between back-to-back inspections.
He urged buyers to know precisely what they want in a home and said there are four steps buyers can take to narrow down their selection.
‘Know what you are looking for and be specific as you can,’ he said.
‘Limit your search to no more than two suburbs, describe what your specific home looks like, know what a deal breaker looks like, and create a buyers brief.’
The second blunder buyers can make is not carrying out their due diligence, Mr Vecchio said.
Mr Vecchio’s first tip is to be specific about what you want and limit your search to no more than two suburbs. Pictured: Residential suburbs in Melbourne
In a hurry to buy a home, the mortgage broker said he failed to properly assess properties for potential deal-breakers.
He was once tricked by an agent into believing an owner would give a home to another buyer if he did not act quick.
On another occasion, he entered a contract for a house in a flood zone, which he could have worked out by researching about the location online.
‘I spent more than $5,000 on solicitors and building fees all because I made offers on properties that ended up being duds,’ he said.
Mr Vecchio said there are three steps buyers can take to ensure they don’t miss important details about a property.
‘Slow down. If you miss out, all is not lost,’ he said.
‘Think of it like a busy bus stop. There is always another one around the corner.
Due diligence: Mr Vecchio urged buyers to physically attend inspections and do research before signing contracts as mistakes could lead to hefty costs
Five tips for first home buyers
1. Know what you want
Make sure your property brief is specific and limit your search to no more than two suburbs
2. Due diligence
Attend property inspections and do your research
Assess your initial budget to ensure it aligns with your long term goals so your purchase does not cost you more in the long run
Being nervous is inevitable, but being prepared will help calm the butterflies in your stomach.
Learn as much about the process as possible and use checklists to guide you through the process.
5. The process will be stressful
Mr Vecchio said first home buyers should be prepared that the process will be stressful so they can take steps to make the journey smoother
‘Be sure you attend inspections, don’t just rely on the report. And three, complete a due diligence checklist.’
Mr Vecchio said the third oversight buyers can make is limiting their budget from the outset which could potentially cost them more down the track.
While searching for his first home, Mr Vecchio’s pregnant co-worker was in the process of upgrading her property to make space for her growing family.
She told him she wished they had spent more on their first home and selected a bigger property because they spent so much money in fees trying to sell it later on.
Based on her experience, Mr Vecchio decided to increase his budget and urged others to rethink their initial expenditure to align with their long term plans.
If you decide to boost your spending limit, Mr Vecchio said there are two things to consider to ensure you don’t burst you bank account.
‘Don’t go overboard. Just because a bank will lend you millions, doesn’t mean you should take it,’ he said.
‘The last thing you want to do is have a mortgage, but have no life.’
‘An easy way to know if you can increase your limit is to track how much you have saving over the past six months consistently.
Mr Vecchio said first home buyers should consider their long term plans when assessing their initial budget as they could end up paying more later down the track if they quickly outgrow their property
‘Add the cost of the rental payments and other bills you will no longer have to pay once you own your property then don’t go over this amount.’
Mr Vecchio said nerves are an inevitable part of the experience, but there are ways to calm the butterflies in your stomach and ensure you make the right decisions.
His fourth recommendation is to be prepared as possible to help kill any nerves.
‘I’d been helping people buy their dream homes for almost years, but I was still freaking out. I was concerned if my home loan would get declined, if I didn’t get approved in time. I was worried about everything and anything,’ he said.
‘If you are feeling nervous, there are three steps you can take.
‘Learn as much as you can about the home buying process, find a fantastic team to help you every step of the way, from your mortgage broker to conveyancer even to your pest inspector, and download and complete checklists.’
The last thing Mr Vecchio wished he was aware of before starting his home-buying journey, was how stressful the process would be.
Mr Vecchio’s fourth tip is to kill your nerves by taking steps to be prepared, such as learning as much as possible about the buying process. Pictured: prospective buyers at a Sydney auction
He said he ended up buying his home more than 12 months after he began searching.
‘At the time I was still living at home, and because of the trials and tribulations, I had thrown in the towels on an array of occasions,’ he said.
‘Knowing my anguish, my mother would regularly look and the house I bought in the end was one she had found.’
Mr Vecchio said he hoped sharing his story would help others have a stress-free experience while searching for their first home.
‘Buying my first home could not have been more stressful,’ he said.
‘If I had known then what I know now, the whole process would have been so different.’
Checklists to assist first home buyers throughout various stages of the process are available on the Hunter Galloway website.