10 First Home Buyer Mistakes to Avoid (and How to Fix Them) — Australia 2026 | Your Property Guide

Most of these are preventable in an afternoon

None of the mistakes below need expert help to avoid. They need a checklist and the discipline to follow it. We’ve packed each one into a single “mistake → fix” pair you can scan in 30 seconds.

The 10 mistakes (and the simple fix for each)

1. Underestimating the all-in cash needed

The mistake:You save a 20% deposit, then discover at settlement that stamp duty, conveyancing, building inspection, and lender fees add another $25K to $40K you don’t have.

The fix: Budget the deposit + 5% on top for ancillary costs. Use our Stamp Duty Calculator to lock in the biggest single number.

~5%

Of purchase price for ancillary costs on top of the deposit

Stamp duty + conveyancing + building & pest + lender fees + council adjustments.

Quick estimate

Stamp duty calculator

State

Purchase price

I’m a first home buyer (apply concessions)

Estimated stamp duty

$26,717

382.00% effective rate on $700,000

This is a simplified estimate using current state brackets. For an exact figure factoring in foreign-buyer surcharges, off-the-plan concessions, or pensioner rebates, use the full calculator

2. Skipping pre-approval (or letting it go stale)

The mistake:You shop without pre-approval, then your offer is rejected because you can’t prove finance. Or your 90-day pre-approval expired and you didn’t renew before bidding.

The fix:Get pre-approval before any open homes. It’s free, takes 1 to 2 weeks, and lasts 90 days. Renew if you’re still searching past the expiry.

3. Borrowing the absolute maximum the bank will lend

The mistake: The bank approves you for $850K, so you buy at $850K. Your repayments swallow 38% of your take-home pay. A 0.5% rate rise pushes you into mortgage stress.

The fix:Stress-test your repayments at 2% above today’s rate. If they exceed 30% of your take-home pay at the stress-test rate, buy less.

4. Bidding at auction without unconditional finance

The mistake:You attend an auction with pre-approval, win at $50K above the bank’s valuation, and your finance gets cut back. You’re bound by the contract with no cooling-off — and no funding gap solution.

The fix:Before auction, get the bank to formally value the specific property and confirm finance up to the auction ceiling. If the valuation doesn’t support your max bid, lower your max bid.

5. Skipping building & pest to save $600

The mistake: Inspection costs $500 to $900. You skip it to save money or speed things up. Three months in, you discover $40K of structural repairs the report would have caught.

The fix:Always commission building & pest. For auctions, do it before bidding (you can’t back out after). See our building & pest inspection guide.

6. Buying on suburb reputation, not address-level data

The mistake:“This suburb has good schools” — but your specific address is in a different school catchment, or the block backs onto a flood-prone creek you didn’t notice.

The fix:For each shortlisted property, check (1) the official school catchment finder for the address, and (2) the council flood overlay map for the specific lot. Don’t rely on suburb averages.

7. Missing first home buyer scheme deadlines

The mistake: You qualify for the Home Guarantee Scheme but apply too late and miss the allocation round. Or you sign a contract one day after a stamp duty concession changes.

The fix:Check scheme allocation rounds before you start shopping (HGS resets on 1 July and 1 January). Confirm your state’s stamp duty concession is in force at the contract date.

8. Buying an apartment without reading strata records

The mistake: The apartment looks fine but the strata report shows a $50K special levy due in 6 months for waterproofing works.

The fix: Always commission a strata report ($200 to $400) before signing. Read the sinking fund balance, recent and upcoming special levies, AGM minutes, and any active disputes.

9. No emergency buffer at settlement

The mistake:Every dollar goes into the deposit and purchase costs. You move in with $500 in savings. Six weeks later the hot water system dies and you can’t cover the $4K repair.

The fix:Hold back at least 2 months of mortgage repayments and $5K of cash buffer for repairs. Don’t deplete your savings to the deposit minimum.

10. Treating the selling agent as your friend

The mistake: The agent is friendly and helpful. You share your maximum budget and your move-in deadline in casual conversation. The agent uses both to extract a higher price.

The fix: Be polite but professional. The selling agent is paid by the vendor and works for the vendor — they have a legal obligation to extract the best price for the seller. Never share your top number, your urgency, or your fall-back plan.

The pattern across all 10

Most first home buyer mistakes come from optimism (assuming the best case will happen) or rush (skipping a step to move faster). A two-week delay to do due diligence costs nothing. A bad purchase costs years.

Next steps

Build the all-in cash budget using our deposit guide.
Get pre-approval (free, 90-day validity) before your first open home.
For each shortlisted property: school catchment check, flood overlay check, building & pest, strata report (if apartment).
Stress-test repayments at +2% rates using the Mortgage Calculator.
Read our cooling-off period guide before signing any contract.

Want one-on-one help with this stage?

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Common questions

What's the most common first home buyer mistake?

Underestimating the cash needed at settlement. Most first home buyers focus on the deposit (which they save diligently) but forget that stamp duty, conveyancing, building inspections, lender fees, and council adjustments add another 5% on top. On a $700K home with no first home buyer concession, that's an extra $35K beyond the deposit.

Can I lose my deposit if I pull out of a contract?

Within the cooling-off period (3 to 5 business days in most states for private treaty), you forfeit a small penalty (0.2% to 0.25% of the price) and get the rest of the deposit back. After cooling-off ends, the deposit is at risk. At auction, there's no cooling-off — the deposit is at risk from the moment the hammer falls.

How much should I borrow as a first home buyer?

Less than your maximum. A common rule of thumb is to keep loan repayments below 30% of gross household income, even if the lender will approve more. The bank's max-borrow figure assumes today's rates and your current expenses; both can change after you settle.

Should I get my own conveyancer or use the seller's?

Always get your own. Conveyancing for the buyer and conveyancing for the seller are different roles with different obligations. The seller's conveyancer represents the seller's interests; you need someone whose only obligation is to you.

What's the biggest mistake at auction?

Going in without unconditional finance. At auction, the contract is binding immediately and there's no cooling-off. If your finance falls through after auction (because the bank's valuation comes in below your purchase price, for example), you've still bought the house — and may forfeit your deposit if you can't settle.

Is it a mistake to buy at the top of the market?

Less of a mistake than people think, if you hold for 7+ years. The bigger mistake is buying at a price you can't comfortably hold through a downturn. Markets recover; forced sales don't get the recovery price.

10 First Home Buyer Mistakes to Avoid (and How to Fix Them) — Australia 2026