While thoughts of that perfect white picket fence home with granite kitchen counters might fill your head, don’t allow yourself to be carried away by the idea of a dream home. This could leave you copping an enormous bill and ultimately cost you the house. Buying a home is probably one of the biggest purchases you’ll ever make, so there’s no need to be impulsive. Arm yourself with research, knowledge and the advice of people you can trust and reputable property advisors. This can be the difference between 20 years in a loving home or champing at the bit to cut your losses and find a new place. Take a look at these four tips to help you on your way to the perfect start to your real estate purchasing history.
- Know what you’re looking for
Before you begin to do your house hunting, it’s important to understand just what you’re looking for. Don’t be afraid to sit down and write out a personal preference checklist. Ask yourself a few of the following questions:
How many bedrooms and bathrooms are needed?
Do I need off street parking?
Where is the closest public transport?
Do I need a large garden for animals or relaxation?
Do I want to be close to work, a school or amenities? Or do I want to be removed from the hustle and bustle of it all?
Answering all of these questions will inevitably lead you to a specific type of home that you’re after. It could be a small seaside fixer-upper, or a modern apartment in the heart of the city. Whatever it is, knowing what you’re after will help narrow the search. When you finally get around to viewing houses, plan to see around seven in one sitting. It seems like quite a large number, but it’ll help give you a good average of what the market is like and what’s on offer.
- Be realistic about your budget
Setting your heart on that contemporary 2-bedroom place in the suburbs could set you up for a disappointment. So be realistic. Budgeting is a serious discipline and takes a lot of practice, so it’s time to sit down and crunch the numbers.
It’s no good just knowing that you don’t have debt and that your payments are all up to date. You need to be ruthless in the way you look at your money. How do you spend it? What are you spending it on? Do you have piles of money left at the end of each month, or are you just getting by? Before you consider buying a house, you should understand a little bit about monthly cash flow and how to streamline it. Once you have the answers to all these questions you’ll have a good idea on what you’re spending your money on. If those numbers aren’t adding up, then you need to buckle down and change your spending ways.
Additionally you should make a list of the new expenses that are going to be coming your way once you’ve purchased a new home. On top of your monthly bond repayments, you’re also going to have to cough up for rates or levies, insurance, repairs and maintenance, and general monthly living expenses. So you’ll want a bit of breathing room before committing to a new house. It’s here where sound asset finance solutions can make all the difference.
- Take out a mortgage that suits you and your family
Unless you’re the child of Richard Branson, you’re probably not going to be paying for the house with cash at the closing table. Which means, mortgage. This is simply a loan that uses a piece of property – in this case, your dream home – as collateral, giving the bank the right to take the home if the person responsible for the mortgage doesn’t hold up their end of the bargain and pay up.
Think about your long-term mortgage options. Are you and your family only planning to buy one home? Is it simply a property to rent out as a stepping stone to something greater? Or are you looking at only having it for a certain period of time? Your plans will affect the mortgage rate that you’re looking for. As a rule of thumb, affordability of a mortgage shouldn’t be more than twenty five to thirty five percent of your regular family income (before tax).
- Know the ins and outs of making an offer
Before signing anything, be sure to visit the property several times. Ask as many questions as you need to and make thorough checks on everything. Any electrical, plumbing or building faults will probably be discovered through these kinds of examinations and can alter the price or destroy a deal altogether. It’s an enormous investment and you wouldn’t want to find any defects in the property once it’s too late.
Once you know you’ve found ‘The One’, there are a few tips to help you secure the right deal. Knowing how long the property has been on the market, the asking price’s position in relation to comparable properties in the area, and even the number of available comparable properties in the neighbourhood can all make a difference to your leveraging strength. You need to realise that it’s inevitably going to be a negotiation, so be sure to leave a little leeway and know your facts.
Now an estate agent will draw up an ‘Offer to Purchase’ for you. This document contains:
Terms and conditions of the sale.
The purchasing price.
The payment terms.
And the date of occupation.
If you’re going to be taking out a home loan, then the Offer to Purchase should be clear that the offer is subject to bond approval obtained within a realistic time frame. Once your loan has been approved, you’ll need to notify your estate agent to ensure that the offer becomes unconditional. This is vital, since, if you’re not able to secure financing, the Offer to Purchase will terminate and neither you nor the buyer will be liable to pay any costs or penalties.
While there are a few more steps to the whole process, these tips should make it that much easier for you. Good luck on your house hunt, and may your first home bring you beautiful memories.