Buying a home in any market can be daunting, especially if its your first time round. In this article I am going to run through some quick tips to get you started, and if of course you have more questions, you can always email us and give us a call.
Buying Secret #1: Get to Know the Neighbourhood
Before you buy, get the lay of the land. What it looks (and sounds) like during perfect home open conditions may not be what it is like the other 6 days of the week. So drop by morning, noon and night. Many a buyer has been disappointed because they thought they found the perfect home, only to find out the area wasn’t for them.
Drive by the house at all hours of the day to see what’s happening in the neighbourhood. Do your regular drive to work from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest shops and other services. Even if you don’t have kids, research the schools because it can affect the value of your home. Buying a home in a good school’s catchment area can be a huge plus when reselling.
Buying Secret #2: But What Should I offer?
Your first offer should be based on two things: what you can afford and what you really believe the property is worth. Make your offer something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid but it all depends on what the market is doing at the time. You need to do your research and look at what other homes have sold for in that neighbourhood as well as what is currently on the market.
There is a plethora of information available to the willing buyer for free and for a cost. But beware not all of it is good information. Many Buyers pay to have online valuations done only to be mis-informed and miss out on their dream home. On line auto valuations are generated by algorithms, not ground level information so don’t rely on them alone to make your offer. I have seen homes with automatically generated valuations for $500,000 only to have them sell for $950,000.
Buying Secret #3: Give Your House a Check-Up
Would you buy a second hand car without getting a mechanic to give it the once over? Of course not. So, hire a building inspector. The cost is small in the scheme of things and it could end up saving you thousands. A building inspector can provide you with a variety of reports and checks on a property allowing you to make a more informed decision. It’s a great way to get an unbiased third-party opinion. It’s better to spend the money up front on an inspector than to get any nasty surprises down the track. Many banks are now also making this a mandatory requirement so always best to check with your bank or broker before making an offer.
Buying Secret #4: Don’t Fall in Love
Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognise that you’re getting a great house for a good value and it is within your budget.
Going with your emotions is being obsessed with the paint colour or the backyard. It’s an investment, so stay calm and be logical. Getting a second option from family or friends is also an option.
Buying Secret #5: Avoid the Hidden Costs
The difference between renting and home ownership is the hidden costs. Many people just focus on their mortgage payment, but you also need to be aware of the other expenses such as land tax, shire and water rates. New homeowners also need to be prepared to pay for repairs and maintenance. Make sure you budget for all the costs so you’ll be prepared and won’t risk financial stress.
Buying Secret # 6: Bigger Isn’t Always Better
Most people are naturally drawn to the biggest and most beautiful house in the suburb. But bigger is not always better when it comes to houses. There’s an old adage in real estate that says ‘don’t buy the best house in the street’. The most expensive home will only appeal to a very small audience when it comes to re-selling. Conversely buying the worst house in the best street may allow you to add a lot more value and reap the rewards.
Buying Secret # 7: The Market Goes Up & The Market Goes Down
There is never a perfect time to buy so don’t obsess with trying to time the market and figure out where the bottom or top is. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down. So, if you try to wait for the perfect time, you’re probably going to miss the boat.
Buying Secret #8: What Are the Neighbours Up To?
Visit your local council and see if any of your future neighbours have submitted plans for new additions or something that might detract from your property’s value down the road. The small amount of time to check can save future headaches. If the property you are looking at is in an area that is under review, check for new roads, road widening, new businesses and other decisions that may impact the homes future value.
Buying Secret #9: Get Your Finances in Order
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates.
Some areas have specific building requirements due to their geographic location and this can have an impact on the cost of any renovations you may do on the home. For example, homes in coastal locations have specific building requirements that must be met due to the impact of salt on building materials. Your local council or a registered builder can assist with advice in this area.