Time to read : 3 Minutes
Buying your first home is one of the most exciting and significant moments in your life.
It’s a place where you can:
put down your roots
decorate how you wish without being told you can’t knock out walls or change the ghastly brown bathroom walls
enjoy a space to escape to.
It’s all yours!
Yes but: this is probably the biggest financial investment you’ll ever make. So it’s important you get every step of the buying process right.
So, what do you need to be across when purchasing your first property? Here are some questions to ask...
What’s the perfect property for you right now?
Make a list of needs and wants. List all of the things that you absolutely need and are non-negotiable and then list those things that you would like that would be a bonus to have.
For example, a two bedroom apartment with a bath may be an absolute ‘need’ for you, whereas a walk-in-robe may be a ‘want’ and not so high on the priority list.
When you’re inspecting properties take your list with you so that you can take notes and evaluate each property once you’ve inspected them. This is particularly handy if you're inspecting several properties in one day.
Think carefully about what sort of property you would like:
Will it be a house, apartment, townhouse or villa?
Consider if it has ample outdoor space – if this is important to you.
If you’re reliant on public transport, location will be important. Is the property located near public transport, shopping centres, sporting facilities and other places that may be important to you?
Top tip: research suburbs that you would like to live in and attend open for inspections and auctions in those suburbs. This is a great way to understand what properties are being sold for so you can determine if they are within your budget.
What’s involved in getting your finances in place?
Get prepared early – once you start thinking about getting on the property ladder – this is the time to look at your finance options.
It’s important to speak to your mortgage broker or lender who will be able to advise how much you need to save and what your borrowing capacity is.
You need to look at all costs associated with the property purchase – not just the purchase price. This can include:
stamp duty costs
land titles fees
solicitor’s fees
application fees
strata fees (if applicable)
mortgage registration fees
lender’s mortgage insurance if you are borrowing over 80%of the purchase price.
If you can get pre-approval prior to searching for your property, you will know what you can borrow.
Should a lawyer review the contract?
The simple answer is yes. It is vital that you have the Contract of Sale for the property that you are interested in reviewed by a lawyer. This could save you a huge amount of money and time if it is discovered that there is something wrong with the property.
Your lawyer will be able to advise you of any restrictions regarding the property, as there may be easements, covenants, overlays or council restrictions about what you can and cannot do with the property.
There may also be illegal buildings on the property. If you are planning to renovate, extend or redevelop the property you need to be across any restrictions, as they may mean you won’t be able to do as you had planned.
Who’s on your “buying team”?
Having the right team to support you (and perhaps your partner) navigate your journey of purchasing your first home is vital.
So who do you need in your corner? Your team might be made up of a mortgage broker, buyer’s advocate, lawyer, financial planner and accountant.
Utilise their skills and expertise and seek their advice so that you can make the best decisions throughout the whole purchase process.
Your lawyer will be able to advise you of any potential concessions and grants that you may be eligible for, while your mortgage broker will be able to give you some good insights into how to obtain approval to purchase your property.
Bottom line
Buying your first home is a significant moment in your life. But you need to make sure you take the time to do the research, ask for help and surround yourself with a “team” who can help you along the way.
Once settlement takes place you can then sit back and enjoy your very own home, and reflect on this wonderful, momentous event in your life journey.
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
