First home buyer mistakes to avoid: a guide to a stress-free purchase

BUYING your first home is an exciting milestone, but it can also be overwhelming.

With so many decisions to make and factors to consider, it’s easy to make mistakes that could lead to financial stress or regret. To help you navigate the process smoothly, here’s a guide to the most common mistakes first home buyers make – and how to avoid them.

1. Skipping pre-approval

One of the biggest mistakes first home buyers make is starting their property search without obtaining a loan pre-approval. Without knowing how much you can borrow, you risk falling in love with a home outside your budget or missing out on opportunities due to financing delays.

Tip: Speak to a mortgage broker or lender to secure pre-approval before beginning your search. This will give you a clear understanding of your borrowing capacity and strengthen your position when making an offer.

2. Underestimating additional costs

Many first-time buyers focus solely on the purchase price and forget about additional costs like stamp duty, legal fees, inspections, and moving expenses. These can add up quickly and strain your budget if not planned for.

Fact: On average, additional costs can account for 5–7 per cent of the property price in Australia.

Tip: Factor these expenses into your budget and set aside a buffer for unexpected costs.

3. Overextending your budget

It’s tempting to stretch your budget to secure your dream home, but overcommitting financially can lead to stress and difficulty managing repayments, especially if interest rates rise.

Tip: Stick to a budget that leaves room for lifestyle expenses and unexpected changes in your financial situation.

4. Focusing on wants over needs

First-time buyers often get caught up in the aesthetics of a property, prioritising features like a modern kitchen or a large backyard over practical considerations such as location, proximity to work, or school zones.

Tip: Create a list of non-negotiables and focus on properties that meet your essential needs. Remember, cosmetic changes can be made later.

5. Not conducting thorough inspections

Skipping building and pest inspections to save time or money can lead to costly repairs down the line. Structural issues or pest infestations can turn your dream home into a financial nightmare.

Tip: Always invest in professional inspections before signing a contract. The upfront cost is worth the peace of mind.

6. Ignoring government grants and schemes

Australia offers various grants and schemes for first home buyers, such as the First Home Owner Grant (FHOG) and stamp duty concessions. Failing to take advantage of these programs could mean missing out on significant savings.

Fact: In 2025, eligible first home buyers can save up to $10,000 through the FHOG, depending on the state or territory.

Tip: Research available incentives in your area and ensure you meet the eligibility criteria.

7. Acting on emotion, not research

Buying your first home is an emotional experience, but making decisions based on excitement or fear of missing out (FOMO) can lead to poor choices.

Tip: Take the time to research the market, compare properties, and consult professionals before making an offer.

8. Neglecting future resale value

While it’s easy to focus on your immediate needs, failing to consider a property’s resale value could impact your financial future.

Tip: Look for properties in areas with strong growth potential, good amenities, and demand from buyers or renters.

Buying your first home doesn’t have to be stressful. By avoiding these common mistakes and approaching the process with preparation and a clear plan, you can make your first property purchase a positive and rewarding experience. Remember, seeking advice from professionals such as mortgage brokers, real estate agents, and solicitors can make all the difference in ensuring a smooth journey to homeownership.

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