For first home-buyers, navigating the dos and don’ts before purchasing their first home can seem like a minefield of choices, and confusing information. Between deciding whether to build or buy, securing finance, researching the market and finding affordable properties, there is much to consider and as the biggest purchase most people ever make – the stakes are incredibly high.
Because first home-buyers have own unique buying characteristics, some considerations trump all others. Before signing on the dotted line, here’s a list of what MUST be considered for all first home-buyers.
1. Understand the market
All large purchases require a large amount of research, and probably none more so than property. It may seem complicated and laborious, but proper research should always accompany any property sale. This should really include obtaining opinions from property management experts such as Templeton Property. Once you have all the information, you can then draw your own conclusions on whether a property represents a good investment based on your needs and borrowing capacity. Look at supply and demand and always try to purchase in your price range in a suburb where there will be continuing demand. This may mean looking in more established areas or sacrificing something from your wish list.
2. Understand Your Financial Position
It’s essential that buyers have a strong understanding of their borrowing capacity, leaving themselves enough breathing space to make repayments should circumstances change. This might mean taking out a smaller loan, buying a smaller home or older property, or buying in a different location. The most important thing is that buyers seek professional and impartial advice about their borrowing ability not from someone with a vested interest in their loan.
Over borrowing is one of the biggest mistakes buyers commonly make, and a thorough assessment of all the costs of homeownership including rates, lenders insurance and stamp duty need to be considered to give a true picture of the financial position of the buyer. Buyers should make sure they have loan pre-approval because it will make it easier to move quickly when suitable properties come along, since they’ll often be competing with others for the same home.
Understand How to Protect Yourself
For those who haven’t bought property before, it might be easy to overlook some of the important inspections recommended to ensure that what you are buying is exactly what you think you are buying. A building and pest inspection costs a few hundred dollars but may identify any structural issues with the property or issues that need repair. This knowledge can give you the power to walk away, or to renegotiate, potentially shaving several thousand dollars off the asking price.
Apartment buyers should also do a strata report to get a clearer picture of possible future fees or levies that may be imposed, as well as report on the building’s maintenance history. Finally, property buyers must understand all the terms of anything they sign, and seek professional advice from a solicitor before exchanging contracts. If some of the terms do not suit, you may be in a position to renegotiate.
Buyers should also use every avenue of advice available to them including to help them make the right choice based on their needs and the property’s investment potential. The more information they have, the more they can go into the process with the knowledge to make the best possible decision.