In This Week’s How’s The Market | Edition 159
-
The Biggest Mistakes First Home Buyers Make (And How To Avoid Them)
-
Should first home buyers max out their borrowing capacity?
-
Is it better to buy now or wait?
Buying your first home is one of the biggest financial decisions you’ll ever make.
And most people go into it thinking they’re prepared…
They’ve spoken to a broker, they’ve got pre-approval, they’ve been to a few inspections.
But what they don’t realise is – the mistakes you make at this stage can cost you tens of thousands… sometimes hundreds of thousands over time.
And the tricky part is, most of these mistakes don’t feel like mistakes at the moment.
They feel logical.
They feel safe.
They feel like the “right” thing to do.
So today, we’re going to go through the biggest mistakes first home buyers make – and how to avoid them.
The Biggest Mistakes First Home Buyers Make (And How To Avoid Them)
1. Not Understanding Suburbs Well Enoug
A lot of FHBs end up purchasing their first homes in suburbs that they didn’t grow up in.
And areas they don’t truly know.
Maybe they want to move closer to the city…
Closer to amenities…
Closer to work…
Though quite often, especially in Melbourne, a lot of the amazing blue-chip suburbs will have good pockets and bad pockets.
Good and bad pockets can have a 10% or greater price disparity within the same suburb.
This could be due to public housing, school zones, and heritage precincts.
So what can you do?
Pound the pavement.
Walk the streets, don’t just drive them.
This will give you a much better understanding of the feeling of the neighbourhood.
Go to the local cafes.
After an inspection, go to the local supermarket and do your shopping there.
This will give you a great understanding of the demographics of the neighbourhood, better than what you would learn from reading articles online.
Go to auctions!!!
This will give you the best understanding of how the market determines value in that specific suburb.
Go to auctions in one weekend across 3 different suburbs, and you will learn that each agency in each suburb quotes extremely differently.
Underquoting could be standard in one suburb and unheard of in another.
2. Not Creating Your Brief In The Sold Section
There is no amount of times I can say this too much.
As soon as you get your pre-approval, spend hours in the SOLD SECTION finding your dream properties.
Not the buy section.
You can then filter to look for properties that have sold only within the last 3 months.
This way, you can see what properties are actually selling for and not what they are quoted, which is always very different.
3. Falling In Love Too Early
This is a big one.
First home buyers walk into a property and think:
“This is the one.”
And from that moment… objectivity is gone.
They start justifying the price instead of questioning it.
They ignore negatives.
They stretch their budget.
And agents can feel it immediately.
Emotion is one of the most expensive things you can bring into a negotiation.
You can like a property.
You just can’t need it.
4. Using Price Guides To Determine Value
This one causes a lot of frustration.
Buyers go to inspections, see a price guide, and base their entire decision off that number.
Then auction day comes… and it sells $100k–$300k above.
And they’re shocked.
But the reality is — price guides are not market value.
They’re part of the campaign.
If you’re not looking at comparable sales, you’re not actually understanding what something is worth.
And that’s how people either:
- Miss opportunities
- Or overpay out of frustration later
5. Not Negotiating Properly
This is where a lot of money gets left on the table.
Buyers think negotiating is just:
“Offer a bit less and meet in the middle”
It’s not.
Good negotiation is about:
- Asking the right questions
- Understanding the vendor
- Reading the situation
- Knowing when to push and when to hold
Most first home buyers either:
- Go too hard and miss the deal
- Or go too soft and overpay
And in this market, that gap can be significant.
6. Trying To Time The Market
This one holds people back for years.
“I’ll wait until prices drop”
“I’ll wait until rates stabilise”
“I’ll wait until things feel clearer”
The problem is — clarity never comes.
And while people are waiting, the market moves.
The reality is:
You don’t need to time the market perfectly.
You just need to buy well when you’re ready
What The Agents Are Saying
In higher price points, price drops are the norm.
At lower price points, properties are selling but it’s harder than usual and compromised properties are sitting stagnant for a long time.
Vendors are experiencing hesitancy, and now we are seeing a big divide between agents with some running on low listings and others remaining consistent.
The Wow Factor!
3 Crimea Street, St Kilda, Vic 3182
Art-filled Victorian grandeur reimagined on prestigious St Kilda Hill.
Why it WOWs:
- Iconic 1882 Victorian mansion on St Kilda Hill (842sqm approx.)
- Curated street art by globally recognised artists
- 11 principal rooms with grand heritage detailing
- Modern extension with chef’s kitchen + garden connection
- Flexible loft apartment / 6th bedroom option
- Prime lifestyle location near Chapel St, Fitzroy & Albert Park
Price guide: $6,500,000 – $7,100,000
Final Thoughts
At the end of the day, buying your first home isn’t about getting everything perfect, it’s about making informed decisions and avoiding costly emotional ones.
If you focus on research, discipline, and long-term value, you give yourself the best chance of buying well in any market.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at [email protected]
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
