Buying a home can be one of the most exciting and rewarding times of your life. Or it can be a roller-coaster ride of financial and emotional devastation. It depends on what you do. And what you do, depends on what you know. Most homebuyers do not have enough accurate knowledge. Worse, many are ill-informed.

This booklet lists 13 of the worst mistakes made by homebuyers. It suggests, briefly, how to avoid these mistakes so that buying a home will indeed be an exciting and rewarding experience.

Financial stress is horrific. It tears families apart. The most important financial question to ask yourself, before you buy a home, is: "What’s the worst that can happen?" What if interest rates rise? What happens if you buy based on two incomes and you lose one income? Think of the future. Your financial limit today will rarely be the same as your financial limit in the future. Sure, it might be better. But what if it’s not? What if things get worse? Play it safe. Make sure that when you buy a home, you will be able to keep your home.

There are TWO kinds of buyers: Those who buy what they want, and those who buy what they need. The public world of materialism is often a private world of financial stress. Do you need four or five bedrooms? Do you need to live in the "best" area? You can buy a better home in a less expensive – and less prestigious – area. What’s more important – struggling to maintain an image of wealth or living safely within your means? Most buyers could save tens, even hundreds, of thousands of dollars by buying what they need instead of what they want. Think about it. Be careful.

Ignoring the Extra Costs and the Hidden Costs

The extra costs of buying a home can add as much as ten percent to your purchase price. In some States, the government stamp duty climbs as high as six percent of the price. Will you need money for inclusions for your home, items such as carpets and curtains? And then there are the hidden costs of ownership – rates, taxes, insurance and maintenance. These can add up to thousands of dollars – all of which are constant costs. The price you pay for your home is not your final cost, it’s the first of many costs. Know what they are and make sure you can afford them.

Failing to Research the Area

There are few things worse than discovering, after you have bought, that you could have bought better. If you intend to live in your home for many years, take some time to check out the area before you buy. Visit the area and make sure you like it. Check the prices of recent sales in the area. When you find the home you love, don’t be shy about inspecting it more than once. The more you see a home before you buy it, the more you’ll know if it’s the right home for you. And, finally, check out the neighbours. Research is always time and money well spent.

Tolerating Poor Service from agents

Before you find the right home, find the right agent – one who will listen to you and one who is prepared to help you find the right home. Sure, agents are paid by sellers, but this is no excuse for the widespread apathy, deceit and rudeness shown towards buyers. All agents are not the same. Try to find one who will sit down and discuss your needs with you. It is a mistake to think that you have to tolerate poor service. An agent who is courteous and caring will make all the difference to you.

Taking the Bait About the Quoted Price

One of the most unethical tricks in real estate is advertising a home at a price well below its real price. Thousands of buyers get their hopes up, only to discover that the home they love was never in their price range. Advertisements which say "price range" or "offers above" or "bidding to start from" are usually misleading. The agents will use the excuse of the "market" to cover their lies. Be very careful – financially and emotionally – when you see "quotes" about likely selling prices. Most times, it’s just a bait to lure you. Take the bait and you’ll almost certainly get hurt in one way or another.

Losing Money with Auctions

While you can often buy at a lower price with auctions, your challenge is discovering the truth about the likely selling price. At auctions, thousands of home buyers lose money through legal and inspection costs for homes they never had a chance of buying. When they realise they have been tricked it breaks their hearts. Auctions can be deceitful and cruel. Unless you know what you are doing, it may be best to do what many buyers do – forget about buying at auction. If you must bid at auction, learn the "7 Rules of Buying at Auction" – (see page 38 of the book, Real Estate Mistakes, available in most bookshops).