Buying a property can seem like a mountainous task, especially if it’s your first time. However with a well-made plan and some expert tips you can confidently forge ahead and be on your way to your dream home. For many first homebuyers the most stressful tasks can be knowing if the property is a good buy and negotiating with the seller or their agent. Here are some of our top tips to getting the best outcomes.
1. Arrange your Finances
Before you begin searching for properties it is important to understand your financial situation and what options are available to you. Speak with your bank or a mortgage broker to find out how far your deposit will take you and what mortgage options are best for you. As interest rates are currently at record lows it is important that select repayments that you will be able to afford if and when the interest rates do eventually rise.
2. Choosing your property
Now that you know what you can afford to spend on your home you can begin the exciting part, searching for the right place for you. During this period you should consider so many factors about each property. While looking at the property you should consider its age, condition, number of bedrooms/bathrooms/car spaces, size of the backyard, flooring, utilities, history of the property and the previous owners.
You should then look at the location of the property. This involves a wide scope and an open mind, so you should consider the street its located on, the suburb (its demographics & average property prices), distance from shopping centres, schools, hospitals and public transport. Lastly, you should also search for development applications in the area so you know of anything that may increase or decrease the value of your property. These are the key factors that will determine the price of your property in the future and taking the time to look now could save or make you thousands in the future.
So you have found the right place for you and now it’s time to go have a closer look. You or your buyer’s agent arranges a time for your inspection and it is time to go and see it in person. But you should have a game plan here too. This is your first interaction with the sellers or their agent and you can get valuable information by looking in the right places and asking the right questions.
Try to show up at the inspection at the beginning and spend as much time there as possible – be the last to leave. This not only allows you to really get a good feel for the property and make sure you haven’t overlooked anything, but also means you are spending more time with the selling agent. This can be highly valuable when it comes to negotiations as they are more likely to be open and have good communication with you once they are familiar with you.
During the inspection you should always ask the following questions:
• What did the property sell for last time?
• Why are the current owners selling and are they under any pressure to sell?
• How long as the property been for sale?
• How many formal offers have been made?
• If it’s a unit, what are the body corporate fees and any levies?
• Have there been illegal additions made to the property?
• Are there any recent building or pest inspections available for review?
• Is there anything other than price that will make an offer more attractive to the sellers?
After the inspection if you are still interested in the property, you should try to have a chat with some of the neighbours and ask them if they enjoy living on the street, if they know of any problems that could affect the value of the property, and if they think the current owners would have looked after the property. This can be valuable insight that you can’t find online, so take the time to have these discussions.
4. Plan the negotiation
Following the inspection you decide that this is the property for you. It should be within your price range, suit the location and type of property you want, and you are happy with the area. It’s important at this stage not to become too emotionally invested as it can be quite costly. Remember that a great property might not be the best pick for you if it is out of your budget.
If the property is selling by private treaty (i.e. not going to auction) then you should take some time to consider what is the maximum amount you would pay for the property, what alternatives you have if you miss out on this one, the critical issues for you and any extra things you may want as an outcome (e.g. to move into the property sooner or later).
This is the time for to create your strategy for negotiation. Consider the listing price of the property and what would be the best price outcome for you. Somewhere between these values is the likely price you will eventually agree on. As a buyer, you need to understand that for some sellers price is not always the highest priority. Frequently sellers are pressured to sell due to financial issues, divorce, death, or they have simply committed to a new property and need to sell their current one quickly. Understanding these factors can give you strength in your negotiation. Once you have made your plan, have your solicitor or conveyancer draw up a formal offer for you and send it to the real estate agent.
5. Building & Pest Inspections
If your offer has been accepted the property is now under a conditional contract. This means that you and the seller have until the contract term length to fulfil all the conditions in order for the sale to go ahead. You should have included building and pest inspections in your contract as you don’t want any nasty surprises when you move in. Understanding the intricate details of the property and its integrity will insure you against any unexpected issues in the near future.
If everything went well during the conditional period and settlement day has arrived then your bank and solicitor/conveyancer will work with the seller’s bank/solicitor to arrange the transactions. They will guide you through this process and answer all questions that you have – and don’t be afraid to ask if you don’t understand anything. Once everything goes to plan, you are the new owner of your very first property! Take a moment to congratulate yourself on such a big achievement and pop the champagne!
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