Buying property needs hefty upfront costs, especially if it’s Sydney or Melbourne. Property dreams can soon turn sour if you discover later that you can’t keep up with your mortgage and have to give up that dream home.
The first step to avoid the trap is being honest about what you can afford. This means knowing about the process of getting your first loan, the implications and ensuring you know what you can and cannot put aside in the way of funds.
Equally important is to remember that there is no such thing as a perfect property, especially if you are on a tight budget.
If you are attending an auction, go in with a threshold price and be prepared to have a “walk-away price” as property expert John McGrath puts it.
Know when to compromise and when to stick to your guns, think about the fundamentals that affect property values – location, land size and aspect, among others – and think about much they matter to you and to potential buyers further down the track, according to a previous article in Property Observer about tips for buyers.
Remember to consider your wants in the future – will you want to stay in this home for more than 10 years, or are you planning to move overseas or to a more family-friendly house later on?
“The best house you can afford now might not be the best house for you in the future, and that’s alright,” says the post.
Also, don’t be focused on getting a bargain price. It is always better to pay a fair price for a premium property than to get a bargain for a sub-par property.