It is always wise to confirm how much you can borrow before you go looking to buy your home. You should also keep in mind the additional ongoing expenses that you will need to cover when owning a home such as rates, insurance etc.
When working out your finances, consider that there are a number of extra expenses involved in buying a new home. The following are a list of additional expenses to expect:
It is important to look around at different house styles that you can afford if you have selected a specific suburb to live in. It can be disappointing if the house style you have in mind is not within your price range.
As an alternative you may need to choose a different suburb but still consider your needs of shopping, transport, schools etc. It helps to make a list of what is essential for you in a home and what would be a bonus. Prioritising the following in terms of importance is a good way to start:
The housing market cycles between three main stages:
Often home buyers pressure themselves into buying something because they feel that they have looked for too long or that someone else may also be ready to purchase that same house.
Buying a home is an important financial decision. If a property doesn't have something that you need, say an extra bedroom for your new baby, then don't buy the property. Look at why it has taken you so long to find something; you may need to reassess your criteria for choosing a home.
Real Estate salespeople often report how they have shown a buyer dozens of homes but it is frequently the first home that the buyer saw (and really liked) that they ended up purchasing. Salespeople are skilled at understanding what it is you are looking for and will do their best to select for you those homes that most closely match your needs.
Don't think that you have to see dozens of homes to be sure; if the first home you see suits you and you like it, then buy it. You may miss out if you choose to look at many homes before deciding.
Home Buyers often try to 'go it alone' and not ask real estate agents for their help. But remember, agents are there to help you find what you're looking for, they do not want to sell you something that you won't be happy with because unhappy customers are bad for business. Ask salespeople questions to get as much information as you need to buy a home.
Overlooking potential future problems can be an issue for first time buyers who are not familiar with building construction. It is often a good idea to get a building inspection completed by a registered and qualified tradesperson, particularly if you are in doubt about any structural elements.
Home Buyers often feel that they need 'approval' from their parents or friends before making the final decision. Remember it is your opinion that matters most; you will be the one living there.
Don't judge a home by the furnishings and style that are in place. Imagine your own furnishings in place to clearly picture and highlight the benefits of the good floor plan of the home.
Don't avoid homes that are for auction because you are unfamiliar with the process. Ask your salesperson to explain the auction system to you; it is a very controlled and fair process.
Try going to several auctions at which you are not going to bid and be an observer. When you decide to attend an auction to bid for a house, then ask the agent to assist you. They will help you to feel comfortable with the process.
Getting attached to your dream home can be a cause of distress/frustration. You see it, you've got to have it, and then it's sold to someone else with more money. It is possible that your offer may not be accepted or that someone else may bid higher than you at the auction.
The good news is there is always another home and while you may not believe it at the time, there really is another home that will suit your needs, and probably become your dream home.
When you find the home you like at a price that you are able to afford, the next step is to make an Offer to Purchase. Your Sales Consultant will prepare this key document with you, making sure it covers all the details that are important to you.
What's the difference? An unconditional offer means the buyer is not placing any special conditions on the purchase. The seller has only to accept the offer for the property to be sold.
A conditional offer means that you have placed one or more special conditions on the purchase, such as 'subject to finance' or 'subject to your home selling'. The sale is not completed until these special conditions have been satisfied within the stated time period. In some cases a conditional offer will be rejected. For example, if the vendor does not wish to wait the extra time for the condition to be filled and another offer is received by the vendor.
Below are the five major elements of an offer:
Price. The price you offer may be different from the seller's asking price. This will depend on your opinion of the value of the property and how it suits your needs.
Deposit. The deposit shows your intent or good faith and will be applied against the purchase price once the sale is unconditional. Your Sales Consultant can provide guidance on a suitable amount for a deposit - 10 percent is usually acceptable. The deposit is normally refundable if the sale does not become unconditional. However, once the agreement is unconditional, the deposit is non-refundable.
Conditions. These are requirements that must be met before the sale becomes unconditional. Conditions are always subject to a stated time and commonly include:
Your Sales Consultant will explain all the details relating to these conditions.
Chattels. Chattels are the items the seller will leave in the home and can include fixed floor coverings, blinds, curtains, dishwashers, stoves and television aerials. It is generally assumed that fixed chattels such as carpet, light fittings, a stove, a washing facility (usually a tub), and any appliances directly wired to the house, for example a waste master, ventilation system etc, are always included. However, other chattels that aren't fixed may be removed. Your Sales Consultant will know what these items are and will make sure you are fully aware of them.
Settlement & Possession Day. Generally, this is the day that the balance of the purchase price is paid to the vendor and yes, you finally receive the keys to your new home.
Finalise the legal requirements. After an offer has been accepted, your solicitor will need to check all the details of the title and prepare all the necessary documentation. You will then need to sign any mortgage documents and arrange for payment of the balance of the purchase price.
Moving your household can be a very busy time. A time when small (or even big) things can be easily forgotten. To prevent this from happening to you it is often helpful to write yourself a moving checklist. To make planning your move easier, see our checklist for preparing to move.
There is normally the option in your contract for you to have one pre-settlement inspection to ensure that the property is in the state at which you agreed to purchase it. This is particularly important for long settlements.
The pre-settlement inspection is an opportunity to see that any changes or damage, since contract day, are remedied by the seller.
Congratulations! The day has come to move into your new home. We wish you and your family every happiness in the future.