Buying a property is the largest investment most people ever make, yet all too often it’s a decision made in haste. Jumping in too soon can cause financial problems and disappointment with your purchase.
To avoid this, here are a few things to keep in mind as you search for your new home.
- Have pre-approved finance before you start looking at properties. Knowing how much you can borrow gives you clear direction as to the areas you can look at buying, and the type of property to look for i.e. unit, townhouse or house.
- Next comes the fun part – finding the property you want. You should have a list of your “essentials” that you take along with you on your “property hunt”, for example 3 bedrooms, 1 bathroom, 2 living areas and a double-car garage. Keep referring back to this list to keep you focused on what you are looking to achieve.
Also consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs?
- Buying a property can be complex and emotional. Avoid buying on your own and involve key family members or friends that are educated in purchasing property. This helps you see a more rounded view of the properties you’re interested in.
- Visiting a property twice before making an offer is essential! This gives you a more comprehensive view of the property before you make that first offer.
- Be careful not to overbuy. You may be qualified to borrow a certain amount of money, but can you comfortably afford to make the mortgage repayments? Analyse your monthly costs – debt, food, cars, etc., and gain independent advice if needed. Make sure you also allow enough to cover extra costs (pest and building inspections, deposit, mortgage insurance, stamp duty and legal costs). Also factor-in moving and renovation costs.
- Make sure you get everything in writing. If the agent says the spa is included, make sure it is in writing.
Never make an unconditional offer – you should protect yourself with these two contingencies:
Mortgage financing – you’re pre-approved, but is the property? Before the bank will lend you money, it will want a formal appraisal of the property. If the property appraises lower than the sale price, the loan may be declined.
Inspection – never buy a property without a building and pest inspection. This relatively small amount can save you thousands if there are problems.
Remember to keep to your budget and take your time to find a place that feels like home.