Five key things you need to know before buying a house

Whether this is your first time buying a home, or you’ve been here before – the property market can be a tricky environment to navigate even for the most experienced of us. Here are the top five things you need to know before heading into the game.

 

1. Be real with what you can afford

Excitement aside, this is the first step you need to take before you start looking. Home loan repayments and the costs of owning a home impact your budget more than rent payments do so consider your budget.

If you are taking out a home loan, while it might be tempting to borrow the maximum that you can borrow, check out how much the repayment is and whether this fits your budget. Consider what the maximum repayment is that you are willing to repay each month.

The big cost to factor in at this stage is your house deposit – which will be at least 10% of the value of the property, no matter how much you can borrow.

If you are ready to buy a home it’s important to know how much money the bank is willing to lend you so that you can move into your own home. 

If you think you need some help buying a house, you can always contact us, we'll be happy to guide you through the process.

 

2. Don’t forget about the silent costs

Before you even sign the dotted line, make sure you look into these often-overlooked costs and weave them into your budget:

  • Council rates

  • Stamp duty

  • Lenders Mortgage Insurance

  • Additional insurances

  • Loan fees

  • Conveyancing

  • Building and pest inspections

 

3. Research, research, research

If you do enough legwork, you’re far less likely to settle (or overpay) for something you don’t really want. Here are some handy tips:

  • Think about the areas you’d like to live in.

  • Check out recent sale prices and suburb profiles on real estate websites.

  • Chat with local agents to get a feel for how the market’s been trending.

  • Check out what’s selling in the surrounding suburbs (and for how much).

 

While you should be thinking about what’s important to you, you should also think about what could boost the property’s value if you decide to sell down the line too. Things like:

  • School zoning

  • Future building plans

  • Transport options

  • Access to amenities

  • The neighborhood.

 

4. Think about renovating

If you’ve already got a house then renovating your home could save you the hassle of looking for a new place and forking out for large costs, like stamp duty, legal fees and real estate agent commissions.

Of course, there are costs and inconveniences involved with renovating, such as finding another place to live while work’s going on or going over budget and timeframes. Plus, you might’ve already decided that buying is the way to go. 

 

5. Negotiate on your terms.

This is likely to be the biggest financial decision of your life – so the last thing you want to do is make an impulse-based purchase just because you feel pressured.

  • You can always walk away. Even if you have a firm price ceiling in mind, it’s perfectly okay to do this. Bottom line is, there’ll be other properties out there.

  • Be wary of emotions. Real estate agents have the seller’s bests interests at heart – and will jump on any personal attachments you might have to the property to make a sale.

  • Even when you’ve signed a purchase contract, you still legally have three clear business days to think about the purchase and back out if you really want to.

And here are some tips to keep in mind when you’re ready to negotiate:

  • Think about supply and demand. If you’ve noticed little interest in the property, or there are lots of similar houses – you might be in a position of power (one of only a few interested buyers) and could offer below the asking price.

  • Go with the market, not the asking price. If you’ve noticed similar houses in the market selling for less than the asking price, then don’t use this as a starting point.

  • Price isn’t the only negotiating tool. You can also negotiate on settlement terms – especially if you need to get into the house quickly. Or you can offer a leaseback as an incentive to a seller who isn’t ready to leave their house yet, or even look into negotiating repairs and buying furniture in their house.

  • The agent needs to make a sale. Even though they’re working for the seller, they often need to make a sale to actually get paid – so it’s worth working with them too.