Making the decision to buy your own home be a very daunting decision, whether it be your first home that you’re going to live in or you’re adding to your investment portfolio. For many Australians, it is their single biggest asset that they own that will hopefully continue to increase in value over time. We’ve put together our top 10 tips to follow when buying a property to avoid your home becoming a nightmare.
- Evaluate your finances and budget and secure your pre-approval
As the saying goes, it’s important to ‘look before you leap’, and this is particularly true for your finances. You need to ensure how much you can afford to repay each week or month, what size deposit you’ve already saved or are targeting to save, and therefore what you’re overall budget looks like. The purchase costs of a property can be quite substantial, so it’s not an asset that you want to be quickly changing your mind on following the purchase.
It can be a great idea to use this opportunity to speak with your accountant, financial planner and mortgage broker to assess what is a sensible purchase price for your own home. Once you’ve found a figure that you’re comfortable with, speak to your mortgage broker about securing your pre-approval. They will ensure that the credit assessor at the bank reviews your situation, and once secured, your pre-approval will be valid for 3 months giving you peace of mind that you can move forward with your purchase.
- Get your inspections carried out
It’s important to check that there isn’t any mould that’s going to cause problems, and there aren’t any critters that you’ll be sharing the house with. It’s important to get a qualified building inspector to assess the structural integrity of the building, as well as having your pest and mould inspections carried out by qualified professionals. If you do happen to find anything that can be easily rectified, you could request that the vendor must fix this as a condition of the contract.
- Is there enough room…?
It’s important to check that your furniture will actually fit in the new property if you’re buying a home to live in. Check out each of the different rooms and living areas, and ensure that you’re comfortable with the space available. If you are buying your own home, it’s also important to check that the property not only suits your needs and lifestyle now, but that it will continue to do so into the future. This is vital if you’re planning to start or grow your family.
- Consider the power bills
In some cases, the homes that are open for display or inspections will have all of the internal lights switched on to display the property in the best possible ‘light’. It’s important to view the property with the lights off during the day to assess if there’s sufficient natural light. If you’re buying a property that has very little natural light, this could mean some expensive power bills for either yourself or your tenants. It’s a good idea to assess the same for air-conditioning or heating and what options are available to you.
- Have a contract professionally reviewed
Ensure that your solicitor casts their eyes over your property contract to make sure that there is nothing sinister written into it. You may be signing off on something that you’re not fully aware of, that could create problems for you in future. Your solicitor’s job is to represent your interests, so ensure that you know what you’re signing to, and if anything is unclear, ask the question before it’s too late.
- Visit the property at different times
As you would expect, a home open or inspection day will typically be at the time when the property is at its best. This could be in the form of natural light, quiet streets and surroundings or otherwise. If you have found a property that you like, consider checking out the property yourself at different times of the day and night, particularly if you’re buying a property to live in. This way you’ll be able to get a good sense of what you’re putting your hard-earned money into.
- Look past the décor
Many real estate agents will use professional stylists to ensure that the furniture and décor present the property in the best possible way. It’s important to look past these items and ensure that you’d still be happy with the property with your own furniture and décor inside. If there is furniture that you like within the property, you could consider requesting that it be included in the sale and have this written into the contract.
- Consider any available grants
If you’re a first home buyer in particular, you may be eligible for grants, rebates or some other form of Government subsidy to assist you in buying your own home. The funds available will typically differ from state to state, and change regularly also, so be sure to review the most up to date information before proceeding with your purchase. Many of these grants could save you $10,000 – $20,000 in some cases, which can make a significant difference.
- Drive around the neighbourhood
If you’re buying a property in a neighbourhood that you’re not familiar with, be sure to take a drive around the area at different times of the day. This will give you a good feeling for the area, including whether it’s a safe and family-friendly neighbourhood or if there are certain parts of the suburb that would be less appealing to live in than others. This is simply to avoid as many surprises as possible after your purchase. You could also consider talking to other residents in the area, particularly if you’re buying a property that you plan to live in.
- If you’re building, check out their other projects
If you’re buying a new property off the plan, or working with a registered building for your own home, consider reviewing some of their previous projects, particularly those from a few years ago. By looking at these properties, this will give you some indication of the quality of the building and the fixtures and fittings used. If a property that they’ve built 5 years ago is already looking worn and torn, perhaps it’s a good opportunity to consider another option.
If you have other tips that you found important in the process, let us know in the comments section. We’d love to hear from you.
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LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.