Preparing to buy a new property?
Whether it’s your first home, your second, an investment property or your retirement home, being prepared before you start looking will save you time and heartache and it will definitely save you money. Here are some suggestions to make buying your new property an enjoyable experience.
Know the total cost of buying a property.
As you walk out of that to-die-for house madly calculating the fortnightly repayments in your head, take a deep breath and ask yourself: ‘Is that the total cost of buying this property?’ There are a number of additional costs that you must consider, and include in your buying budget. These include:
- Loan application fee
- Building inspection fees
- Mortgage insurance
- Government fees such as stamp duty
- Solicitor fees
- Moving costs
Get the finance sorted
Talk to your bank about how much you can borrow based on your income. A mortgage broker can also be a good option. Have all your questions prepared before the meeting and ask about what type of loan would best suit your circumstances. Shop around as there could be better deals on offer with both fixed rate or variable rate loans are available. And, if you are a first-home-owner you could be eligible for a government grant. Your lender should be able to help you with this.
List all of your ‘must haves’ in a property, plus a few dreams!
Once you have your finance sorted and know exactly how much you can spend make a list of the features you really need in the property. Then you can add those extra ‘wants’. Consider these issues when drawing up your list:
- Will the property suit me/my family’s needs now and in the future?
- How far am I prepared to compromise? On location? Size? Age of property?
- Can I live with it until I am able to renovate/change?
- Can I see myself/us living here?
Look.. Look.. Look.. Then look some more!
Choosing the area you want to live in before you start looking will save time. Are these things important to you and your family?:
- public transport
- medical facilities
- shopping centers
- sports facilities and clubs
Read about recently sold properties in the area that match what you are looking for. Do the ‘sold’ prices fall within your budget?Look beyond the pretty gardens and lovely décor. These things are appealing but you should focus on what you need and anything else is a bonus! And don’t discount a property that looks tired and unkempt. A good clean and fresh paint may be all that is required to bring it back to life.
Check off which of your essential features each property has and add any extra delights you might find. Avoid being swept off your feet by a beautifully decorated place that may turn out to be totally unsuitable for your needs. An expensive mistake!
Building/Pest inspection is a must
When you find the right property and when you make your offer be sure to get a building and/or pest inspection done. A building and pest inspection is a thorough examination of all accessible areas of the property to determine the overall condition and identify any defects or pest problems. Each building/pest inspection should be undertaken by an experienced professional to guarantee you have a detailed knowledge of the structural condition of the property.
A comprehensive building and pest report should also be provided after each inspection. The inspection and report will cost you a few hundred dollars but its money well spent and could save you thousands in the long run.
Due Diligence Checklist
‘Buyer beware!’ Always good advice. Before signing any documents or handing over your hard-earned money, read the Due Diligence Checklist and ensure nothing about the property you want to buy could cause you problems in the future.
“Looking for your dream home or investment property can be an exciting time, but it also represents a significant and ongoing financial commitment. Be sure to prepare yourself and keep a level head”.