Wrong size home

Wrong size home
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Nearly 20% of millennial buyers and 20% of Generation X buyers said they regretted they didn’t buy a bigger house. However, waiting for the ‘perfect’ home is not always an option. See next slide!

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Waiting for the ‘perfect’ home

Waiting for the ‘perfect’ home
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Millennials buying a home for the first time are up against some hurdles, including the deposit and settlement costs. With home prices having spiked, these hurdles become boulders.

“To play in the market, one must get in the market by buying (and hopefully getting a good deal on) a home that is within their immediate financial striking range,” says real estate agent Mia Simon. “This is difficult for some, as they want the three bedroom/two bathroom home where they can envision raising their children. The problem is that by the time they’ve saved the deposit to afford this house, it has appreciated to the point where it is now unaffordable.”

Discover how to make your home look more expensive inexpensively!

Not hiring an agent

Not hiring an agent
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“When shopping for homes on online listing services, you’re not really getting the full picture or price,” says a real estate agent. “The home might have smells, sounds or sights that you’re not seeing while looking at the photos on the listing. Not only that, if you’re interested in a home and reach out to the listing agent, they’re not going to have your best interests at heart. They’re legally bound to the seller, so you may not get the best deal.”

Working with a local real estate agent in person allows them to know more about your needs and wants, and gives them the opportunity to work for you to find your future home. You can also appoint a buyer’s agent if you are thinking of buying at auction. They can also find suitable properties, complete background checks and negotiate with the seller – reducing some of your stress.

Not shopping for a mortgage

Not shopping for a mortgage
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Finding the home you want is a dream come true. Making an offer and starting the closing process shifts that dream one step closer to reality. Millennials should be mindful that their loyalty by no means belongs to the lender that pre-approved them, however. It’s in your best interest to shop around for the best interest rates and terms that fit your budget.

Not attending a home inspection

Not attending a home inspection
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This is certainly one of the biggest mistakes a buyer can make when buying their first home. Don’t let your real estate agent go to the inspection without you. Do not send your mother or brother or second cousin on the home inspection. Take time off work and walk through the home slowly. In fact, make sure you’re involved with the entire process, including hiring your own personally vetted inspector. Once all is said and done, be sure you read the inspection report!

Not factoring in resale value

Not factoring in resale value
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Most millennials buying their first home aren’t swimming in cash, which is why it’s a good idea for them to make sure to factor in resale value when purchasing a home.

Find something that can build equity, such as new carpeting, hardwood floors, or granite bench tops, and that will also appreciate over time, like the neighbourhood is up and coming – new shops and restaurants are popping up around it. While no one can predict the future, millennial home buyers need to think ahead to what the home they’re buying could be worth when they go to sell it.

Not staying within their budget

Not staying within their budget
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It’s easy to look at your mortgage and get caught up in the affordable numbers popping off the page, but this monthly price on the listing doesn’t take into consideration insurance, taxes, land tax, rates and mortgage insurance if your deposit is less than 20%. Do the maths to include these crucial fees to see if you can really swing the house you want with the budget you have.

Buying at the wrong time

Buying at the wrong time
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As much as you shouldn’t wait for the perfect home, it’s also important you don’t commit too quickly. “We typically encounter clients whose number one goal is understandably getting a good deal on their home purchase,” says real estate agent Mia Simon. Try and buy when fewer people are buying – late autumn and winter.

Forgetting about closing costs

Forgetting about closing costs
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Buying a house is exciting, but it also requires you to factor in stamp duty, legal fees, bank and mortgage registration fees, building and pest inspections, lender’s mortgage insurance (if you’re borrowing more than 80% of the purchase price) and home building insurance. First homebuyers may get stamp duty concessions. According to Sale Ezy, for a property in the $500,000 to $750,000 price range, you’ll need to factor in extra $30,000 for additional costs.

Emptying your savings

Emptying your savings
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Your first home may need various renovations and repairs, which can drain your bank account quickly. In fact, you may not even have money to do such things at all if you emptied your savings account just to purchase your home! “That’s a growing pain for the first-time homeowner, when stuff breaks,” says banker John Pataky. “They find themselves in a hole quickly.”

A way to get around this is to have a savings fund specifically to cover your deposit, closing costs, moving expenses and repairs.

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