Buying a house is no small feat. For many of us, purchasing a house is the culmination of many years of planning and saving. You want your new home to be something that you love for years to come, so it’s important that you do all the necessary prep-work.
Whether you’re a first-time homebuyer or looking to buy a house as an investment property, the property market can be a daunting and confusing one. That’s why we’ve put together a simple guide to help you navigate buying a home. From evaluating your finances to organising building inspections, read on to find out what you need to know before you sign on the dotted line.
Evaluate your finances and budget
So, you’ve decided to take the plunge into the property market. That’s excellent news! Buying a house is one of the biggest decisions you can make, but it can also be a hugely rewarding one. Because its financial implications are so huge, the first step for any prospective home buyer is to evaluate their finances and budget. It’s not the most exciting of things to do, but it’s absolutely essential.
Ask yourself: what’s your budget, and what can you realistically afford in the years to come? There are lots of free online tools that you can use to figure out how much you can spend each week, fortnight, or month, depending on your goals. Once you’ve figured out your income and expenditure, the next step is to find out how much you can afford to borrow. An online home loan calculator will help you estimate how much you’ll likely be approved for.
At this point, you might be wondering: how much can you borrow from the bank? It’s a good question, but a loaded one. The best way to get a feel for where you stand is to have an honest and frank conversation with your accountant or your financial planner. It’s good practice to have these conversations early on, before you start looking for properties, so that your expectations stay realistic.
Understand the costs involved in buying a house
Unfortunately, buying a house isn’t as simple as putting down a deposit being done with it. Upfront costs can sneak up on you, so it’s always a good idea to save more than what you’ll need for a deposit. Some fees that you’ll need to pay on top of your deposit could include:
- Loan application fees – these fees arise when you set up a loan. They can range from a few hundred to more than a thousand, depending on the situation and the lender. However, some lenders are willing to waive these fees, so it doesn’t hurt to ask them if it’s a possibility.
- Inspection fees – building and pest inspections are always recommended before finalising the deal as you want to make sure that the house is in a sound state. Inspections average between $500-$700, but be sure to get in touch with a provider to get a more accurate quote.
- Legal and conveyancing fees – although it’s theoretically possible for you to complete the legal aspects of buying a property on your own, it’s advisable that you engage a licensed conveyancer to prepare your legal documents for you and to provide other legal advice. It’s generally recommended that you put aside at least a few thousand dollars for this.
Research, and research some more
Research is key to a smooth and stress-free buying process. It’s important to do all your research right at the beginning so that you aren’t blindsided at any point.
Once you’ve determined your budget and how much ‘house’ you can afford, you can start researching the areas you’d like to live in and the type of house you’d like to purchase. Consider making a list of your non-negotiable requirements; for example, the house must be close to public transport, the house must be close to cafes, the house must be close to schools, and so on. A real estate professional will help you with the research side of things. From providing information on the area to finding new listings, a real estate agent will be on hand to answer all the property enquiries you may have.
Once you’ve found a house or a few homes you’re seriously interested in, you can use property profile reports to get an idea of what similar properties sold for, the sales and rental history of the property, as well as an estimate of what the property is worth today. Domain’s Home Price Guide is one of the best free online tools you can use, so it’s definitely worth utilising.
If you’ve taken your time to do your research, you’ll be far less likely to overpay or settle on something you didn’t actually want. By laying down the groundwork, you’re much more likely to get a really good deal on a house you love.
Trust your gut
Sometimes, it’s best to trust your instincts. One of the most common questions home buyers ask is: How many times should I look at a house before buying it? The truth is, there isn’t one right answer for this. It’s OK to buy the very first house you look at, and it’s also OK to look around for months or even years. You shouldn’t completely disregard the numbers, facts, and figures, but it’s not a bad idea to rely a little on your instincts, too. The most intelligent decisions are the ones that are based on both logic and instinct.
Don’t underestimate the importance of building inspections!
Buying a home is a huge investment, and you want it to last for years to come. A positive emotional response can be very encouraging, but you shouldn’t get too invested in a property until after you’ve performed structural checks.
Anyone looking to purchase a house should get the property inspected by a qualified building inspector. Building inspectors are trained to look out for the red flags that can all too often go by unnoticed when buying a house. Think about it as a kind of test drive.
Identifying major red flags isn’t so easy for those of us who don’t know much about buildings and construction, but for a qualified building inspector, it’s a piece of cake. A building inspector will tour the property thoroughly to determine whether there are any structural issues. For example:
- Sloping or bouncing floors
- Damp or mouldy walls
- Cracked or broken roof tiles
When you hire an inspector from Jim’s Building Inspections to do the job, you’ll receive a full report after the inspection has been completed. Our inspectors will search for safety hazards, major defects, and minor defects so that you can get a full-picture of what the property is actually like. We use visual cues to make our assessment, as well as moisture metres, thermal imaging cameras, and sounding devices. The actual inspection itself usually only takes an hour, but a report will be made available to you usually within 24 hours.
If you’re looking to buy a new house this year, it’s highly advisable that you organise for a building inspection. A building inspection will help you avoid problems and extra costs down the track, so it’s a small price to pay for peace of mind. At Jim’s Building Inspections, we perform pre-purchase property inspections for both residential and commercial properties. With multiple packages to choose from, we’ll tailor our service to suit your unique needs. Contact us today on 13 15 46 for an obligation-free quote.
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