7) Not knowing how much you can afford before making and offer.

The Easiest way to avoid this it to get Pre-Approved finance first, this is very different to just getting pre-qualified for finance and even with pre-approval, you should not sign an unconditional contract because if the valuation doesn't come up, even though you can afford it the lender can still withdraw the offer to finance it. Then you can be left in default and risk forfeiting your deposit.

To avoid this I recommend you always sign a contract with at least two contingencies

• Mortgage Finance; you're pre-approved, but is the house pre-approved? Before a lender will give you the money they will want an appraisal of the property to confirm that there is enough equity in it to justify the loan. If the property appraises too low then the loan may be declined. To avoid this make your contract subject to finance approval. Your lawyer can advise you on the correct wording to use.

• Inspection; never buy anything, existing or new without a thorough independent professional inspection. If termites are active in your area I strongly recommend you make the contingency,"subject to receiving a satisfactory building and pest inspection from appropriate experts" Again your lawyer can advise you on the correct wording to use.

• Insurance; You will also need to confirm you can get adequate insurance coverage. In some areas it can be difficult to get hazard insurance for flooding or storm damage.