What are the top things to consider before buying a house?
It can be hard to know where to start when buying your first home. It’s one of life’s biggest purchases after-all.
So that’s why it pays to know these things before you even consider buying a house or investing in real estate:
1) firstly, the real cost of a home is considerably higher after stamp duty, conveyancers, inspections, legal bills etc;
2) start with humble beginnings;
3) remember pictures don’t always paint the truth;
4) and know that it’s all worth it because everyone needs somewhere to live.
These tips are really important when planning to buy your first home. So with that in mind, let’s explore each consideration further.
1. The Real Cost
Though interest rates may be at a historical low, the real cost of a home is considerably higher after stamp duty, conveyancers, inspections, legal bills, title searches, and more.
We always say, however, that the first step in buying your first home should be knowing how much you can realistically afford. How much deposit you’ll need depends on the property price and available mortgages.
Council rates can also cost you annually depending on your area, and if the home is older, or needs updating, renovations may cost significantly more. If you’re buying into an apartment building or flats, enquire as to how much owners or body corporation fees are annually. Generally speaking, if the building has more public space or well kept amenities such as a gym or swimming pool then you can expect to see a rise in fees.
Weigh up whether the amenities are worth it or not. For example, they could save you considerable money on a gym membership, not to mention the convenience factor.
When you factor in any associated costs with your mortgage broker, and your home loan amount will vary greatly. This means the final cost of a house is often thousands of dollars more, so keep that in mind when budgeting too.
Another ‘hidden’ cost is stamp duty. We often get asked “do first home buyers pay stamp duty?” and the answer depends on the property price and state you’re purchasing in.
For example, houses in Victoria priced under $600,000 are exempt from stamp duty for first home buyers. While houses that are valued more than $600,000 attract lower stamp duty rates for Victorian first home buyers.
Often for off-the-plan properties, first home buyers only pay stamp duty on the land value. It should be noted that in order to avoid duty, the buyer needs to sign the purchase agreement before construction begins.
2. Start Small
Congratulations! You’ve saved for your first home and applied for your first home loan, you’re likely even eligible for the first home buyers grant. But with all these dollars now at your disposal, don’t lose sight.
Think humble beginnings when buying your first home. This is a great example of walking before you run, keep your budget considered and only look for properties you can afford.
It’s a good idea to find out how much the first home owners grant is worth, this will also impact how much deposit you’ll need for your first home.
Don’t be afraid to negotiate with the real estate agent and do your research. Depending where you are, the market may be very different in Adelaide compared to real estate in Melbourne.
If you’re not sure about what to pay come auction day, we always recommend looking at auction results. Investigate nearby properties to benchmark your dream home and see what the most recent sales prices for similar homes were.
3. Pictures don’t always tell the whole story
Pictures don’t always paint the truth, that’s why nothing replaces an inspection as well as a thorough property evaluation.
Find a quality building inspector and make sure they do a complete inspection of the home and its foundations.
Pound the pavement of the suburb and do your own research. Start with the local paper to find out about crime rates, and make enquiries at the local council to see if there’s any proposed future developments that may impact the potential property price—positively or negatively.
4. It’s worth it in the end
Know that it’s all worth it in the end, because everyone needs somewhere to live. You’ll either be paying rent on a home, or the mortgage repayments.
Buying your first home is exciting, so don’t let it turn into a nightmare. It pays to consider these tips when searching for houses for sale.
Don’t forget, these tips apply for buying or building your first home as well.
If you’d like to know more about the first home buyer journey, or you’re stuck on the first step in buying a home then talk to a property expert for the right guidance and advice.
08 December 2020 News