As a first home buyer it can feel as though you are flying blind, or being offered a deluge of conflicting advice. Here are 9 tips to help First Home Buyers feel comfortable and confident during this exciting first step into the real estate market.
1. REAL ESTATE ADVICE
Unless your loved ones or work colleagues have a handful of personal experiences in buying and selling Real Estate, their well meaning advice may not be helpful at all.
It’s helpful to bounce off someone you trust, but feedback should be positive, solutions focused and considered. If someone you love is offering negative and sometimes unwanted advice, find another trusted advisor and stay off topic while in their company. This is meant to be an exciting experience, not a debate.
One of the main important considerations for buyers is whether the property will be a good investment. First and foremost your new home needs to suit your lifestyle, location you can afford and what you personally like. A great way to ensure your shortlisted properties are not only a great place to live but also a good investment for the future, is by checking the history of similar properties over a 5 year period by using real estate websites. If similar properties have decreased in value or stayed around the same value, look at other options. If similar sales have shown good growth during the period, this should indicate that type of property is performing due to high demand going forward.
You can’t really choose which agent you are going to purchase from, but keep in mind the agent is working 100% for the seller. Their job is to get the best price from the market, so they will apply pressure to any interested buyers to push the price up. They may indicate interest from other buyers that aren’t necessarily written offers. They may leave information out about negative aspects of the property. Be sure to ask plenty of questions and don’t be afraid to clarify if you don’t get the answer in full. Be clear with why you are asking and don’t be afraid to tell them you’re interested, and you just want to make sure you are fully informed.
Any new home purchase should be insured by the buyer straight away, so have your insurer’s phone number handy to make they phone call straight after your offer is accepted. If anything was to happen to the property between contract signing and settlement, it is important to protect yourself and not rely on the sellers insurance which may or may not exist.
Professional advice is really important in assessing a property when you might have a few grand ideas to personalise the home and make it your own. A builder or building inspector you’ve been referred to can help you bounce around any ideas you have prior to committing to purchase. Also, unidentified issues with a property that you as a buyer can’t necessarily see could save you a lot of money and a lot of heartache after you buy.
A solicitor is a very important part of the contract process and it helps to have someone in mind before you buy. Speaking with a solicitor regarding your plans to buy may identify some special conditions you may need in your contract prior to signing. Different local councils have different standard searches and it’s nice to know you have covered all bases to protect yourself from any nasty surprises. Many solicitors will review your contract prior to signing, free of charge.
Getting your finance approval is usually the second most important part of a buyers focus. Hunting around for the perfect loan can be exhausting and confusing. Not all banks will necessarily lend to you or even offer you the same rate as your friend. Factors include employment status, deposit amount, marital status, past loan history and dependants. Utilising the free services of a finance broker can alleviate a lot of the stress and time involved in finding the perfect loan. Having a representative dealing with the bank on your behalf during the transaction can be extremely beneficial both with stress and time and actually save you money.
Many first home buyers aren’t thinking twice about what school catchment they’re in, but plenty of first home buyers I’ve met are not surprisingly pregnant within a few short years. It’s the next step, I get it. Making sure you at least consider the local schools can potentially save you tens of thousands of dollars in either relocating costs, or private school fees if you suddenly decide the local school is not for you.
9. STAMP DUTY
Budget for your house purchase to include the amount stamp duty (or transfer duty). There are apps available so you can calculate it on the spot or easily search the amount online. The buyer pays the stamp duty at settlement of your purchase. Purchases in Queensland up to $500,000 are exempt from the fees but many buyers are spending more than $500,000 on their first home.
This is of course an unavoidable cost to buy in an area you love, but what many buyers forget to consider is, that if they buy a smaller home and then upgrade, the costs to pay an agent commission and then a second round of stamp duty on the second home purchase. A lot of money is going straight into the pocket of the Office of State Revenue, so if you can stay on and renovate or extend the home to suit your needs you are avoiding a large expense in the process.
Go ahead and enjoy the process of buying your first home, you’ll never forget it and will always have an interesting story to tell!