So you’ve made it this far and you’re ready to buy a house? Exciting and scary days!
Property is a major asset, so as with any significant financial commitment, you need to focus on what you want and why. A great place to begin is by writing out what your priorities are.
Firstly: What is essential to you? List several things that are vital and stick to these. Examples may be location, or a key feature like a garage. Knowing your budget and sticking to that is obviously very important too.
Secondly: What would you particularly like? It is easy to mix up the essential with what you’d love, so thinking carefully about the differentiation between these two will help you define your search and be realistic. It’s very unlikely you’ll get all that’s on this list but it will be reassuring and very satisfying if you can get most of these items ticked off.
Lastly: A wish list. Achieving any of these is not necessary, but would be a definite plus and may even become a final deciding factor.
Do keep in mind that the bigger the land and the house that you purchase, the more work you will have to do in the years ahead. Maintenance and landscaping will not only cost you financially, but also practically in regards to your time. On the other hand you may be able to subdivide your property later on for more profit, so this could be a feature you want to specifically have included on your above-mentioned list.
Remember too that if you buy wisely, e.g. a house that is a bit rundown but in a great location, you’ll benefit by paying out less initially, resulting in a smaller loan and interest, with the added bonus of being able to make the improvements you want at a rate that you can manage. Ultimately this will mean an increase in your property’s value. When buying a home you are basically a property investor whether that is your main intention or not. There are obvious benefits from buying low and later selling high.
Be patient and be realistic! House buying is an emotional decision so it really pays to stick to your list so you’re not tempted to buy the wrong house, or waste your time. You definitely don’t want to get stuck with a lemon! There are some very important things to look out for before forking out your hard-earned money:
1) Read market reports and find out what houses are selling for in, or near, the areas you’re interested in.
2) Ask the real estate agent lots of questions. They are legally not allowed to withhold any information from you, so ask away.
3) Get a builder’s, or engineer’s, report. That professional assessment can save you a world of nasty surprises and wallet ache further down the track. They can make exterior and interior checks for plumbing and electrical standards, quality/defects of the building, moisture checks, future maintenance issues, earthquake testing and meth inspections.
4) Have a solicitor lined up if possible. They will give you independent legal advice and will make sure all the legal processes are followed, including checking property reports, such as Land Information Memorandums (Council LIM reports) and titles.
5) Think about how easily the house could resell – any key features that will help it stand out against other properties, like ease of maintenance, sea views, or proximity to transport links and shops… this will be to your advantage when it comes time to make a move, or to rent out.
6) Consider what additional costs are involved, e.g. if the driveway is shared, what the rates or body corporate fees are, and whether there are any protected trees.
It’s wise to keep the real estate agent at arm’s length, remembering they serve the interests of the seller (and themselves) not the buyer. Knowledge is power and gives you the upper-hand when it comes to negotiating, so be cautious - for example if the agent knows you want to spend a particular amount but can pay up to $50,000 more, then you’ll most likely end up paying the extra $50,000!
Get any reports and legal advice as quickly as possible, since time is of the essence in today’s seller’s market. If you find the house that’s right for you and think the price is fair, make an offer that’s close to the asking price. You need to be able to move quickly and appeal to the seller before someone else pips you at the post with a better offer.
Finally, just as buying is an emotional decision, selling often is too. You might want to try sending a letter with your offer, appealing to the seller as to why you believe their property is right for you. Making that personal connection by giving heartfelt comments on what you love about their home, just may give you that slight advantage that could see your offer accepted.
Happy house hunting and good luck! And remember, if you want your house to become a rental, we are the experts to help - Dominion Property Management.