FIRST HOME BUYER TIPS
Things Every First Home Buyer Needs to Know
Whether you are buying your first home, upgrading or downsizing buying a property is a big deal. The market can be confusing and difficult to navigate, but buying doesn't need to be stressful so below are a few buying tips to help you.
1. BEING TOO QUICK OR TOO SLOW
Buying a property when you haven't done your research because you are afraid of missing out is equally as dangerous as finding your ideal home early on and not purchasing because you haven't "seen what else the market has to offer yet" then missing out on your ideal home and forever trying to find a home that measures up to the one that got away.
2. FAILING TO RESEARCH AN AREA
Knowing the area is important for a multitude of reasons, from knowing if the area suits your current and future needs (think kids and schools) to knowing the benefits and pitfalls of an area and will help you to recognise a good deal when you see one.
3. BEING TOO "SMART" WITH AN OFFER
Picture this, you have been looking for your ideal home for a while, given up every Saturday morning to go house hunting, perhaps even missed out on the kid's sport to find your new castle. You finally find the one you have been searching for and after watching some reality shows on TV and speaking to well meaning friends or family members who have more experience in the property market than you you play games with your offer, be it the conditions or the price or simply my feigning disinterest.
Someone else comes along and realising this is what they have been looking for (just as you did) and planning to live there for an extended period (just as you are) decides to make a fair offer and buys the property whilst you are busy being "smart" and missing out because you wanted to save yourself that $20,000 on the purchase price which would be inconsequential in 20 years time when you are finally ready to sell the house. Never finding as suitable a house for as good a price again and driving past the one that got away, yearningly staring down what could've been your driveway to the welcoming front entrance.... if only you hadn't been so "smart".
4. EXCEEDING YOUR FINANCIAL LIMITS
The buy price for a property is only the beginning of the associated costs, you have legal costs, acquisition costs, stamp duty costs, not to mention potential land tax just to name a few. Upon settlement you have additional costs, council rates, interest and mortgage fees not to mention property maintenance. Ensuring that you are able to cover these costs in the event that the worst should happen - you or your spouse lose your job or are unable to work is paramount in ensuring your financial limits are not exceeded.
5. NOT ENLISTING INDEPENDENT EXPERTS
It may surprise you to learn that a lot of Real Estate Agents get kick-backs from businesses whose services they recommend that is why it is always best to have your own mortgage broker, your own building inspector, your own pest inspector, etc. That is also why we at CityCoast Real Estate will NEVER take kick-backs from businesses and will not promote other businesses services.
6. ACCEPTING POOR SERVICE FROM REAL ESTATE AGENTS
Before you find the right home, find the right agent, not all are equal. Yes, the agent works for the seller but there is no excuse for agents to treat you, the buyer with the level of apathy and lack of consideration so often shown. Find an agent who take the time to sit down with you and discuss your needs who will help you to find your home and help you buy your home. An agent who is courteous and cares will make all the difference to you.
7. FALLING FOR "BAIT PRICING"
One of the most unethical and sadly common tricks of Real Estate Agents is advertising a property at a price well below its actual price (or advertising a home with a price range, "offers over", no price or is up for auction) beware of "bait pricing". Thousands of buyers fall in love with and even spend hundreds of dollars trying to buy homes that were never in their price range are usually misleading.
These agents use the excuse of "the market" to hide their lies. If you are given "quoted prices" and they seem too good to be true, be careful not to take the bait. You will most likely wind up getting hurt - both emotionally and financially.
8. NOT ACCOUNTING FOR PURCHASE COSTS
Not only is there the requirement to save up for the house deposit, which is equal to 20% of the purchase price (unless you want to pay Lenders Mortgage Insurance), you also need to factor in stamp duty, legal fees, building and pest inspection costs and in some cases renovation costs. The extra costs when purchasing a home can add as much as ten percent to your purchase price, so you need to be able to account for these costs into your initial purchase.
9. NOT CONSIDERING ONGOING COSTS
The price you pay for your home is not your final cost. There are many ongoing hidden costs associated with home ownership, which can include rates, taxes, insurance and maintenance. Such costs can add up to thousands of dollars, all of which are constant costs incurred year-to-year. Make sure that you know what these costs are and that you can afford them going into the future.
10. BEING UNAWARE OF "GAZUMPING"
Sometimes after you make an offer and it is verbally "accepted", another buyer will offer more. No matter what you are told, you have never legally purchased a home until both you and the owner sign a legally binding contract. One way of reducing the risk of being gazumped is to ask your agent to confirm that should another buyer make an offer higher than yours, you will be given the chance to increase your offer before the home is sold to the other buyer.