Top 6 Mistakes First Home Buyers Make (and How to Avoid Them)

Buying a first home is equal parts exciting and terrifying. It is also one of the few purchases where people feel pressure to make a decision quickly, often on limited information, while signing documents that can have serious legal and financial consequences. Below are six common mistakes first home buyers make in Melbourne and across Victoria, and practical ways to avoid them before the process becomes more expensive than it needs to be.

First home buyers often focus on the purchase price and deposit and forget the additional costs that can arrive at the worst possible time.

Common examples include stamp duty (subject to concessions), lender fees, lender’s mortgage insurance if borrowing over 80 per cent, building and pest inspections, conveyancing and bank fees, and the simple reality that moving costs money.



How to avoid it: Prepare a full costs to complete budget early. Allow a buffer for the unknowns because there will be unknowns. A mortgage broker can assist with finance modelling, and a property lawyer can identify transaction costs triggered by contract terms.

Looking at properties without knowing borrowing capacity is a fast way to waste weekends and fall in love with homes that are not financially realistic. It can also place buyers under time pressure later when they need formal approval quickly.

How to avoid it: Obtain pre approval before serious inspections begin. It clarifies the range, strengthens negotiating position, and reduces the risk of scrambling if the right property appears.

A common trap is purchasing for today’s lifestyle without considering likely changes, including working arrangements, relationship changes, children, commuting, caring responsibilities, or simply the need for space. Buyers also underestimate the impact of location, including transport, schools, planning controls, and local amenity.



How to avoid it: Take a longer view. Consider the suburb, not just the dwelling. Review local infrastructure projects, zoning, overlays, and comparable sales. If the property is further out, factor in the real cost of time and travel. It is amazing how quickly affordable becomes

exhausting.

Fixed versus variable, offset accounts, redraw, introductory rates, loan products are not interchangeable. Many buyers choose based on the headline rate rather than flexibility, fees, and what happens when rates move.

How to avoid it: Run the numbers at higher interest rates and ensure repayments remain manageable. Consider how the loan works in real life, including access to funds, break costs, and the cost of changing later. Use a broker if needed, but still understand what is being

signed.

In Victoria, the Section 32 (Vendor’s Statement) and Contract of Sale are not standard paperwork. They contain disclosure material and legal terms that can affect the property’s value and usability, including easements, covenants, zoning, outgoings, owners corporation

rules, defects history, and special conditions.

Likewise, failing to conduct building and pest inspections can turn cute period charm into structural surprise.

How to avoid it: Organise building and pest inspections where appropriate and have a property lawyer review the Section 32 and contract before signing wherever possible. For apartments and townhouses, pay particular attention to owners corporation records, fees,

and any building issues.

Many first home buyers believe contracts cannot be amended, or that signing quickly is the only way to compete. In reality, contracts often contain special conditions that can be negotiated, including finance dates, deposit terms, settlement timing, inclusions and exclusions, and risk allocations.

How to avoid it: Slow down just enough to understand what is being agreed to. Legal review can identify unusually onerous special conditions and propose amendments that better reflect the buyer’s position.

First home buying is not just a property decision. It is a legal transaction with long term financial consequences. The best outcomes tend to come from preparation, clear budgeting, finance readiness, proper due diligence, and contract review before commitment.

Buying your first home is a big step, but having expert legal guidance can take the stress and confusion out of the process. Avoid common first home buyer errors and ensure a smooth purchase with MLS LEGAL your trusted property law specialists. Contactus today!