Are you considering entering the property market this year? Maybe you are looking to expand your investment portfolio? If so, there are a number of things you can do to improve your chances of success in the property market this year.
Find out below.
Be prepared to act quickly
Many home buyers don't realise how quickly they need to act when buying in a hot market. Some home buyers will inspect the property, go home and run the numbers and then come back the next week for another inspection. But in a hot market, a property can be gone in less than a day. It pays to do your research early and be financially prepared before you inspect the property so that you will be a prepared buyer, ready to secure the property on the spot.
Don't forget all costs
If you have done your research, you will know that there are more costs involved than just the home loan. For the purchase you will need to ensure you have the funds to cover stamp duty and government transfers, cost of your solicitor or conveyancer, pest and building inspections and loan setup costs. After settlement budget for strata fees and/or council rates, repairs, electricity and water.
Research surrounding locations
Property ‘hot spots’ are always a popular topic and experts are constantly trying to predict the up and coming areas. Look carefully into why they are indicating that it is a hot spot and then apply this reasoning to other locations you are researching. It may be things like a new industry coming into the area that is providing more employment or a new freeway being constructed that will decrease travel times to where people work. You may find that there are suburbs surrounding the hotspot area that still have similar features, but have significantly lower property prices. The best hot spot is one that you uncover yourself and you get in early before others rush in and inflate prices.
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 quick snapshot of how your loan stacks up, 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. You can apply online at a time and place that suits you.
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 limits and then take the time to thoroughly research before you make an offer or commit at auction.