Some home buyers have earmarked 2016 as the year that they will buy their first property or an investment property.
So what can you do to give yourself the best chance of succeeding? Find out below.
Never too early to start researching
Many buyers make the mistake of putting all of their eggs in one basket and focus on just one property. However, it is important for home buyers to research several different properties in different areas. Not only will this give you a realistic sense of what properties are selling for, but it will help stop the ‘fear of missing out’ from influencing your decisions.
Prepare your finances
Before you can purchase a property, you will need to have your finance ready. Obtaining a home loan pre-approval early will give you a guide as to much you can purchase a property for. Also, as you have already completed the groundwork for the home loan application, you can confidently make an offer or bid at a property auction.
Understanding how much you can borrow is quick and easy and can be completed on the go. To get a get instant feedback on whether you would qualify for a particular loan amount, try the State Custodians Instant Online Pre-Approval. It only takes a few minutes and gives you an instant result on-screen and an email confirmation of the details - perfect for when you’re out and about.
For formal pre-approval, you will need to complete an application and supply your documents like payslips etc. But don't think you have to wait in a queue. At State Custodians you can apply online at a time and place that suits you. Get started here.
Don’t forget the costs
If you have done your research, you will know that there are more costs to factor in just what you need as a deposit for your home loan. For the purchase you will need to ensure you have the funds to cover stamp duty, government transfers, cost of your solicitor or conveyancer, pest and building inspections and loan setup costs. Check out our simple Stamp Duty calculator to help calculate the government fees. After settlement budget for strata fees and/or council rates, repairs, electricity and water.
Take advantage of the inspections
It is recommended that before buying a property, both a building and pest inspection is done to ensure it is in a good condition. This could save you a lot of money down the track, especially if there is a problem with the property such as termite or foundation issues.
If you do find problems during the inspection, but you are still keen to purchase that property, you could use the issues to negotiate the purchase price down. Always be cautious if problems are uncovered since, if it is too bad it could mean that the lender won’t consider it to be a suitable security for the loan. The valuer will note any “essential repairs” which are things that need to be done to bring the property up to a standard expected by the lender. The lender will then need you to show that you have the funds left over after the purchase to get the work done. Always weigh up cost versus benefits with any properties that are in poor repair.
Be wary of your emotion
Purchasing a property is one of the biggest commitments people will make in their life, so it can be hard to keep your emotions out of the decision making process. So in order to avoid overpaying, you will need to learn how to keep your emotions in check. This can be done by:
1. Getting professional advice from your team of advisers! Your solicitor or conveyancer will provide great advice from a legal perspective, your lender for finances and potentially even an accountant or financial adviser. They can all help you make rational decisions without letting emotions get in the way so ensure that they are all approachable and provide good advice that you can rely on.
2. Keep your mind open: There are plenty of houses out there and although you may think you have found the perfect property, you will need to be prepared in case you are outbid.
3. Engage a buyer’s agent. This is someone who can help you select the property and do the negotiating for you. They will charge a fee to do this but could help you purchase for less and avoid issues of getting emotionally involved.
So before you start looking for a property to purchase, take the time to establish your purchase and lending limits and thoroughly research before you make an offer. For help to run through the loan calculations give our Lending Specialists a call on 137262 or leave your details here and they will contact you. They will help you understand your home loan options and fast track your pre approval so you are ready to purchase.