First Home Buyer Guide

 First Home Buyer Guide

Buying a new home is an exciting time. But it can also be incredibly stressful. For most people, buying a home is the single largest investment they will make in their lifetime. And if you get it wrong, you could end up paying the price for many years to come.

We’ve put together a short guide for the first home buyer to help you understand the key steps to finding your dream home.

Work out how much can you spend

Before you even start looking at properties, you need to know how much you can realistically spend. You’ll need to work out a budget to determine what monthly repayments you can comfortably handle and how long it will take you to save for a deposit (if you don’t have the money already saved).

Once you have your personal finances in order, it’s time to start talking to lenders or mortgage brokers to find out how much you can borrow and what the repayments will be. Be sure to leave yourself enough wiggle room in case of changes in interest rates.

Don’t forget to factor in additional costs like stamp duty, other government fees, legal and conveyancing fees and pre-purchase building inspections.

It’s also worth seeing if you’re eligible for government assistance schemes like the First Home Super Saver Scheme or the First Home Owner Grant.

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Research the market

The real estate market can be tricky for a first time buyer. So it’s helpful to try to get a handle on the market trends. Make a list of what you want in a property. This could be a shortlist of locations, number of bedrooms or bathrooms, outdoor space, parking and so on. Once you have your list you can start researching properties on websites like Realestate.com or by talking to real estate agents.

You’ll want to find out information like:

  • How much properties you’re interested have sold for in different areas
  • What factors have affected the final selling price
  • How much competition there’s been for different properties in your chosen areas
  • What are the overall market trends right now

It’s also worth attending auctions to get a sense of what the actual climate environment is like and to prepare yourself for bidding at auction.

Choose service providers

Once you have a sense of what you can spend and you’re satisfied that there are properties you want in your price range, it’s time to research and choose your various service providers. Here’s a shortlist of services and providers you will need to research or contact:

  • Mortgage broker or financial advisor
  • Home loans including interest rates and lenders fees
  • Lawyers or conveyancers
  • Licensed pest and building inspectors

Find your new home

With your finances and service providers in order, it’s time to find the home of your dreams. Make a shortlist of properties you like and start going to inspections. Try to inspect as many properties as possible, even if you find one you love early on. Going to inspections and talking to agents is essential for comparing properties and learning about the market.

Try to be as unemotional as possible when looking at properties. Be practical and don’t get swayed by the shiny new thing. Make sure the property meets your requirements. Remember, when it comes to buying a home, close enough isn’t good enough. Most people will spend decades paying off their home, so you want to ensure you make the right purchase.

Prepare your paperwork

Once you’ve found a property (or properties) you’re interested in, you’ll need to get your paperwork in order before making an offer. Make sure you have documented pre-approval for your loan before making an offer or bidding at auction. You should also ensure that your deposit money is available so it can be quickly transferred to the agent to secure sale.

Get the property documentation from the agent. This should outline the condition of the property as well as what is included in the purchase and what will be removed at settlement.

Organise a property and pest inspection from a licensed builder. Make sure you go through the inspection reports in detail before making an offer or signing a contact. Make note of any problems with the property or required repairs. You can use these during negotiations to try to get a better price.

For sale by auction, you should organise an inspection before the auction day. For a private sale, you can organise an inspection before making an offer or make an offer subject to inspection.

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Make an offer

With all your paperwork lined up and the property fully inspected, it’s time to make an offer. For a private sale, that will mean making an offer in writing through the agent. For sale by auction, that will mean bidding at auction day.

Before you make your offer, you should discuss it with the agent. They will give you an indication whether the vendor will consider the offer or if it’s too low. In most cases, the first offer will not be accepted, so be prepared to negotiate. Make sure you know what your spending limit is and be prepared to tap out of negotiations once you reach your limit.

Once your offer has been accepted, you will need to go through the contracts in detail. Make sure your lawyer goes over the contracts before you sign anything. Once the contracts are signed you will need to transfer the deposit and negotiate a date of settlement.

Finalise settlement

In the lead-up to the settlement date you will need to finalise the loan documents with your lender. At this point it is also worth considering income insurance, especially if your deposit is less than 20%.

You will be given an opportunity for a final pre-settlement inspection of the property. This is the time to ensure that the condition of the property matches what has been laid out in the contact. You should have time to negotiate any final repairs before the settlement date.

On settlement date, the final financial transfers will take place. This should all be handled by your conveyancer, with everything prepared ahead of time. Once settlement has taken place, you should receive the title deeds and documents as well as keys and access to the property.

Moving in!

All that’s left to do is organise home and contents insurance and move in to your new home!

Alan Easton

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