So, you’ve decided to make the leap and buy a home? Congrats! But before you go off with a smooth-talking real estate agent, there are some things you should know. This guide has you covered.
CEO of Property Buyer, Rich Harvey, says that buying a home can be both exciting and daunting. With this plan of attack, you’ll be on the right path to finding — and buying — your dream home.
Decide on your needs vs. wants
Just like with your career, it’s a great idea to put together a list of needs and wants for your home. After all, you have to live in it! Harvey says you should work out two things straight away: the suburb and the type of property. The man makes sense: “Setting your goals and deciding what you want upfront will save you lots of time during the searching process.” In terms of suburbs, choosing one comes down to your lifestyle and bank account. Do you like the hustle and bustle of city life? Do you prefer leafy suburbs? Spend a few days driving around and asking the locals what they like. Next, Harvey says to think about what stage you’re at in life. Are you planning to have a family? Are you starting a home business?
Sort out your finances
The next step is to get your finances in order. As Harvey says, there’s “no point going shopping for a property without money in your pocket.” Since the mortgage market is super competitive, the best thing to do is speak to a broker or someone at your bank about a finance pre-approval. It’s free to get a pre-approval, and most are valid for three months, so this means you’ll be raring to go if a great property comes up.
Get familiar with the market
Now that you know what you want (and what you can afford), it’s time to start doing some research. Thanks to listing sites like Domain, researching online is easier and more effective than ever. The key is to refine your search — by specifying details such as suburbs, prices and availability, you’ll end up with a list of properties that are worth your time. Once you’ve got a list, arrange inspections with the agents. As Harvey says, “This is where you really appreciate what a home has to offer.” It’s also when you may find out that photos and descriptions can be deceiving!
Create a shortlist
After you’ve spent a few weekends rushing between appointments, you will be ready to create a shortlist. Harvey says this is when you need to be decisive and “dismiss those properties that don’t stack up.” Read over your notes and evaluate things like the price, location, condition, appeal, layout, style and size of the houses.
Calculate the value of potential homes
Once you’re happy with your shortlist, gear up to do a different kind of research — “valuing”. In other words, it’s time to figure out what the properties are worth. The easiest way to do this is to ask questions. What have nearby houses sold for? How long do houses in the area tend to be on the market? What condition is the property in? What is the value of the land? How close is it to shops, schools and public transport? If you need a little help, ask a bank valuer for their professional opinion.
Enlist a solicitor
Don’t have a solicitor? Guess what, it’s time to get one! Harvey says a solicitor is an “invaluable ally” for first homebuyers. Why? They are experts in reviewing contracts, reading fine print and identifying any dodgy or odd bits. They can also chat to the owner’s solicitor on your behalf about things like settlement periods, interest rates and deposits.
Put your negotiating cap on
Negotiation. Ladies, this is the time to be ruthless and decisive. So you’ve found your ideal home, but the agent tells you that other buyers are “interested”? The question is, how do you know if they’re telling the truth? The fact is, you can’t, which is why you need to make the right offer, and at the right time. Harvey says “negotiation is an art”, and he’s right. So what can you do? Firstly, try and find out why the owner is selling. Secondly, know the value of the property and how much you should be paying for it. Finally, make sure the agent knows you’re a genuine buyer.
Check out how to negotiate when buying a property >>
Sign the contract
After your solicitor has given the contract the tick of approval, get your pen out because it’s time to sign! You will then need to pay a 0.25 per cent deposit in what is known as a five-day “cooling off” period. Once the five days are up, you will need to pay the rest of the 10 per cent deposit. The ex-owner will also sign the contract and then the solicitors will exchange them. At that point, you become a proud home owner! Go out and celebrate.
Organise building inspections
During the five-day cooling off period, get a professional building and pest inspector to come in and assess the property. Harvey notes you may need to splurge a little to get a quality report: The best inspectors usually charge anywhere between $500 and $700. But since it’s their job to examine the home with a fine toothcomb, it’s worth it.
Here comes the fun part — settling! The final settlement takes place six weeks after the exchange of contracts. Your solicitor — who is probably your new best friend by now — will come along and help you transfer the house in your name.
Happy house hunting!
Rich Harvey is the Managing Director of propertybuyer, a company that helps property investors and home buyers search for and negotiate the right property at the right price. Visit www.propertybuyer.com.au for more information.