Despite recent developments such as the Global Financial Crisis weakening trust in banks and mortgages, becoming a home owner remains one of the great financial adventures of most peoples’ lives. The housing market in Australia’s metropolitan areas means that the potential rewards for gaining equity in a home are incredible, but buyers – especially first time buyers – should make sure they have all their bases covered before making such a significant investment.
Get professional help
One of the best ways you can immediately cut down on the dizzying array of concerns before you as a home buyer is to hire a licensed home inspector or buyer’s advocate. These professionals have extensive knowledge and experience with real estate and can help winnow out any hidden catches in the home or deal you’re looking at. Having a lawyer on hand is also smart.
Not all advice is equal
When you let it be known you are in the market for a house, you will likely find yourself inundated with unasked for advice from friends, family, colleagues – everybody. Keep a polite ear out, but remember that the housing market changes constantly and that none of these advisors are likely to do the research that you and any professional advisors are.
Set out your budget first
Do some maths and carefully consider how much you can repay at your current income. Don’t sign a deal which puts your total debt payments above 40% of your income, and try to negotiate a pre-approved mortgage before you start shopping – so you know your limit. Make sure you have a 20% down payment saved up, since banks are much harder to negotiate with otherwise.
Don’t hurry, and be wary of estate agents
Real estate agents will try and hustle you into an uncomfortable deal. They will call you out to inspect a beautiful house and urge you to “snap it up” before someone else can. Don’t be in a hurry to buy; look for a good deal.
Inspect the property thoroughly
Obviously you’ll want to look around the house before you buy, but remember to look in the dark corners. Check flues, heating systems and appliances, the ceilings, walls, water pressure; anything which might suddenly reveal a huge cost.