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|Posted on June 17, 2018 at 7:53 PM||comments (1295)|
1. Are you ready?
The saying goes, “look before you leap”, and it couldn’t be more true than when considering purchasing a property. Before you leap into finding your dream home, take a breath and ask yourself the big question - “am I ready? If you’re still experiencing itchy feet and wanderlust then possibly you’re not quite ready for the commitment at this time in your life.
But if you think you’re all in, assess whether you have job security needed to make it work. High job security (12 months plus) will give lenders more confidence in you and will give you a better chance of getting your foot in the door.
If you have already have children then the urge to own your own home will probably be high. Unfortunately, the banks are fully aware of the costs involved in raising children, and for each dependent you have the amount you can borrow tends to decline substantially (in some cases by up to $50,000 per child).
2. Evaluate your finances and budget
You’re probably wondering how much you can borrow from the bank. Good question! The answer is determined by a multitude of factors. A mortgage is a massive financial responsibility and to get a good idea of where you stand it’s best to have an honest conversation with your accountant to figure out what you can afford. Knowing this will help when you start searching for a property.
Apply for a copy of your credit file and make sure you clear away debts. If you have bad credit, it might not be the best time for you to purchase a home or investment property. If you have multiple credit cards and loans to pay off, minimise these as much as possible. Reducing your limit on your cards will help you secure a larger finance amount. If you’re struggling to meet credit payments, reach out to your provider to help you renegotiate the terms of your payment schedule.
3. The cost of buying a house
It pays to seek advice from a financial advisor, accountant or lender to truly get the scope of the full costs associated with buying a home. Here is a list of costs you will likely incur:
Other costs to consider are ongoing mortgage repayments, utilities, moving costs, council rates and strata fees, home and contents insurance and mortgage protection insurance. Not to mention repairs and maintenance to your home. It’s wise to have $5,000-$10,000 in a savings account for emergency repairs.
Extra costs when buying an investment property
It’s essential that you cover maintenance, insurance, property management, council and water rates, land tax and body corporate fees (if applicable) on top of your interest payments, if you are borrowing. Lenders are tighter than they used to be and they expect a full 20% deposit.
4. Investigating mortgages and interest rates
Bonus points if you have your deposit ready, but you still need to shop around to find the right financing for you. Be careful to make sure you understand all the terms of the agreement. Find out about the:
If you don’t have a deposit saved, full finance of the purchase price may be an option by using your renting history as proof of savings or by having a parent go guarantor, but without equity there are more risks associated and you will be required to have full insurance.
There are two options with interest rates - fixed and variable. Your financial advisor can help your decide which will suit you best, there are benefits to both. A fixed rate mortgage would be suited to someone budget-minded. A variable home loan has a bit more risk, but gains are made when interest rates fall helping you to possibly pay off your loan quicker.
5. Getting home loan pre-approval
Otherwise known as conditional approval or approval in principle, securing pre-approval before even searching for your home is ideal so you can know your price range. By providing your bank or lender with your financial details - such as your credit report, savings, income and investments - they will be able to review the information and grant you with pre-approval to borrow up to a certain amount. Now you’re ready to go shopping!
6. Choosing the suburb and type of property
When riding the emotional rollercoaster of buying a home, it’s important to have a clear sense of what you are looking for. The list of priorities will vary for investors, singles and those looking to purchase a family home. Consider making a checklist of all your non-negotiable, “must have” requirements. Here is a list for wannabe homeowners to work from:
To find out where you can afford to buy, you can research property prices, and there is plenty of existing property market data to help you quickly find the median price of an area you are interested in.
Figuring out what type of property is right for you:
Buying an investment property
When buying an investment property there are going to be a few different factors to consider than when buying a home. Establish whether you are going to fix it up and flip it or if you want to hold onto the property and rent it out.
A different set of criteria for choosing the type of property to invest in is necessary. For strong capital growth you need to find a property that will increase in value. This can take a while, but look for:
7. Do I need a real estate agent or buyer’s agent?
Reach out to local real estate agents for information about what’s for sale, tips for buying a house in the area, what the area is like and how the property market is performing, along with any other general queries. Appointing a buyer’s agent is handy if you are looking to buy at auction, but they can also work to find suitable properties for you, negotiate with the seller, and complete background checks on the property - eliminating some of the stress in a stressful time!
8. Property inspections
As soon as you enter the home you are considering buying, you will get an immediate emotional response - negative or positive. While it’s easy to walk away when you get a negative vibe off a property, it’s much harder to do when the feeling is positive. A positive emotional response is very guiding, but don’t get too invested before making important structural checks, investigating the utilities and sussing out the new neighborhood!
Things to watch for:
If you are sure you want to go ahead with purchasing the property, get a qualified building inspector to make an assessment. They will look for structural defects, pest infestations, faulty wiring, plumbing and drain issues, asbestos, lead paint, and more.
9. Preparing for Purchase
A licensed conveyancer can request inspections for you while also managing the exchange of contracts and other legal searches. Once you have found the property you want to purchase, get a property valuation to help you figure out the right price to offer.
Finally, you are ready to make an offer! Don’t low-ball here less than 10% of the asking price, otherwise you may miss out when higher offers stream in. When you’ve decided on a figure, reach out to the agent and let them know how much you’re willing to pay and your deposit amount.
Next, simply exchange contracts and pay the deposit. Both you and the seller are not legally bound to the sale until the contract of sale has been signed and swapped. Included in the contract of sale is the:
If you’ve bought through private treaty you will have a cooling off period. This is not available when sale is made by auction. During this period you can cancel the sale if you change your mind, but you may be required to pay a penalty. The cooling off period varies by state.
In the time between exchange and settlement - generally six weeks - you should be busy arranging the balance of the selling price by finalising the finance and signing the mortgage. You will also want to insure your property, and you will be required to take out building insurance.
Once the balance of the purchase price and Stamp Duty is paid, the settlement of the property has been made and you will receive your keys and title deeds. Essentially, the lender will transfer your money to the seller and the property is ready for you to occupy!
10. Moving into your new home
You are almost ready to move into your home! Now you will need to sort out utility accounts, pack your belongings, and employ the help of a removalist and possibly a cleaner! Don’t forget to transfer the address on all your accounts and organise for mail redirection.
|Posted on June 2, 2017 at 12:47 AM||comments (502)|
The NSW government has announced a new package designed to even the playing field for first time buyers and bring housing costs under control.
The new measures, effective July 1, include stamp duty exemption for first time buyers purchasing new or existing properties under $650,000. Buyers of homes under $800,000 will also get stamp duty discounts.
Those purchasing homes with small deposits will no longer have to pay 9 per cent stamp duty charges on lenders’ mortgage insurance.
Other measures are aimed at further restricting investor purchases. Investors will no longer be able to defer stamp duty payments on off-the-plan purchases for 12 months.
The same concession will become available for off-the-plan buyers who intend to live in the properties they are purchasing.
The stamp duty surcharge on foreign investors, meanwhile, will increase from 4 per cent to 8 percent.
NSW Premier Gladys Berejiklian also announced eligibility criteria for the existing $10,000 First Homeowners Grant would be restricted to those building new homes valued up to $750,000 or those purchasing new homes valued up to $600,000.
|Posted on November 3, 2015 at 10:06 PM||comments (133)|
The Reserve Bank has once again left interest rates on hold at the historic low of 2 per cent. However commentary in the meeting, suggested a rate cut could be on the cards in the near future.
Auction clearance rates in Sydney and Melbourne hit their lowest points this year and capital city property prices flat-lined over October. This drop off, coupled with some banks raising their interest rate, is casting shadow over consumer spending leading into Christmas.
It will certainly be an interesting couple of months to end 2015, and likely to be a very different playing field to what the year kicked off with,
|Posted on July 13, 2014 at 10:43 PM||comments (149)|
Here are five more tips to help you form a winning auction strategy:
1 - Boost your knowledge
“This will also give you a realistic insight into the prices properties are advertised for and the prices they actually sell for. Before you attend the auction, ensure that you have a plan including knowing when you intend to commence bidding and at what price point you should stop.
“If you have any questions about the auction rules, ask the agent in attendance.”
Buyers agents will tell you that confidence goes a long way on auction day. They often recommend that you position yourself where you can be seen and heard by all. Your bids should be loud and clear.
“You need to control your emotions at auction because emotions will cost you money,” says founder of EPS Property Search, Patrick Bright. Bright suggests that auctions aren’t for everyone and that if you’re at all nervous it’s a good idea to have someone else to bid on your behalf.
3 - Get a feel for the numbers
“If you blow your limit, your dream home can become your nightmare liability as you struggle to make mortgage repayments that are more than you budgeted for,” says Bright.
4. Be organised
All of these tips boil down to being organised. From taking the time to learning about the suburb you’re interested in, to preparing your finances, then checking your ability to secure a home loan and getting to the auction early, it all helps build your game plan.
5. Contact a Conveyancer
Contact a Conveyancer to inspect the Contract for Sale of Land before Auctions and to take care of the legal side of the deal. If you think we can be of further assistance contact us on 02 9644 1551.