Buying your first home is exciting, but it comes with challenges. Melissa Barlas, Melbourne Conveyancer brings her expertise to the table, sharing insights on the common pitfalls in property buying. With her help, we'll cover everything you need to know, from skipping inspections to ignoring legal details, equipping you to make a safe and informed purchase of your first home.
Melissa Barlas, an experienced conveyancing lawyer and founder of Conveyed covering Victoria and Queensland, gives you the 5 most common and most detrimental mistakes first home buyers make.
Skipping Pre-purchase Activities
Pre-purchase activities are all about gathering important information about a property to avoid surprises down the road. Here's what they typically include:
- Legal Review: Checking the property's title and any existing legal claims to confirm everything is clear.
- Physical Inspection: Assessing the property to estimate any future expenses for repairs or upgrades.
- Boundary and Ownership Details: Looking into boundary agreements and any past disputes.
- Easements and Encumbrances: Identifying any rights others may have on the property, like access paths or utility lines.
- Regulatory Compliance: Dig deep and check if the property complies with local zoning laws and building codes.
- Financial Assessment: Calculating all costs involved in the transaction, including hidden expenses and fees specific to Victoria and Queensland property transactions.
- Permitted Uses: Checking what types of constructions, renovations, and activities are allowed.
- Liens: Finding out if there are any financial claims against the property from creditors or tax authorities.
Building a competent legal team at least two weeks before starting negotiations with sellers is also a wise move to cover all bases.
Neglecting Long-Term Market Trends
When buying your first home in Victoria and Queensland, examine how property values in the area have changed over time and what future predictions are.
With the help of your legal team:
- Look for growth indicators such as new construction projects or improvements in public services and transportation.
- Consider the area's economic health, including job market trends and commercial development. Areas with new amenities or infrastructure improvements increase property values. In contrast, zones with declining infrastructure or high foreclosure rates decrease property values.
- Review the performance of school districts in the area. Properties in highly rated school districts maintain or increase in value.
- Keep an eye on crime rates. Zones with lower crime are more attractive to homebuyers and contribute to property value appreciation.
- Check for any environmental risks, such as flood zones or high fire risk areas, as they affect insurance costs and resale values.
Ignoring Hidden Costs
Common hidden costs include property taxes, homeowners' insurance, and maintenance expenses which can fluctuate depending on the property's location and condition.
Utility costs can vary widely by region and should be estimated ahead of time. Homeowners Association (HOA) fees are also often overlooked, especially in gated communities or those with many amenities.
To avoid surprises, request a full disclosure of all fees and regular expenses from the seller or agent. Also, budget an additional 1-2% of the home's purchase price annually for maintenance and unexpected repairs.
Overlooking Legal and Zoning Restrictions
Legal and zoning restrictions define what you can build and how you can use a property. Victoria and Queensland have very specific rules, regulations and laws that affect what you can or can’t do with specific property.
Before making your first offer, you or your conveyancer should verify the local zoning laws and any property-specific covenants or restrictions.
Look into the process for obtaining variances or permissions for non-conforming uses. Also, examine the future zoning plans for the area, as any planned changes could affect your property’s intended use.
Forgoing a conveyancer with extensive knowledge of property law in Victoria and Queensland to save a few hundred dollars will expose you to hidden liens. Imagine suddenly owing tens of thousands of dollars in addition to your mortgage!
Forgetting to Plan for the Future
Financial assessment is the last of the most common mistakes. First-home buyers neglect to estimate all costs related to the property purchase. To avoid this mistake, start by listing the purchase price, legal fees, and stamp duty. Don't forget to include loan application fees if you're financing.
Next, estimate future expenses.
Look at potential repair needs like roofing or plumbing and factor in the costs for any planned upgrades. Set aside a budget for regular maintenance such as painting or garden upkeep. Always have a buffer for unexpected repairs, as these can arise without warning. Consider utility costs too, as these can vary based on the property’s efficiency and size.
Summary and Final Thoughts
The first home-buying process in Victoria and Queensland without expert guidance most often leads to unforeseen challenges and costs. Melissa Barlas, an experienced conveyancing lawyer in these regions, highlights the importance of understanding every aspect of your potential new home. From pre-purchase activities like legal reviews and inspections to hidden costs and legal restrictions, Melissa’s advice is invaluable.
Remember, cutting corners and skipping expert conveyancing support might seem like a savings at first, but it's a risky move that ends up costing you dearly. Without a professional, you will face unexpected fees and legal challenges that multiply your costs exponentially.
