Buying your first property is a daunting task. There is so much to think about and organise, from getting your finances in order to researching, attending open for inspections and negotiating, to settling into your new home. To boost your confidence through your home buying journey, here are nine things all first home buyers wish they knew before they purchased their first property.
1. It pays to shop around for a mortgage lender
Before your property search even begins, you need to know how much the banks are willing to lend you, and with the changing market conditions, it’s important to know where you stand financially from the get-go. But shop around. Do your research, speak to the banks directly and mortgage brokers, look at the all the fees, read the fine print and compare your different options.
House hunting can take more time than you expect, so if three months have passed since you were pre-approved, check in with your lender to make sure nothing has changed in how much you can borrow and always be on the lookout for better deals.
2. Buyer’s agents are more accessible than you realise.
Thought to be a luxury for home buyers transacting at the high end of the market, buyer’s agents are an invaluable resource for home buyers at all levels. They assist with every aspect of the home buying process, from research to attending open for inspections to negotiating on your behalf.
Many first home buyers are opting to engage a buyer’s agent as it levels the playing field, especially when it comes time to negotiate. They’re not emotionally invested and are highly knowledgeable and skilled. Plus, you have the added benefit of not spending your weekends attending open for inspections, you have access to off-market properties, and the buyer’s agent does all the due-diligence for you.
3. Wrap your head around property finance at the beginning of your home buying journey.
Many home buyers learn about property finance on the run and are hit with the hard truth of how expensive buying a property can be during the process. You’re not only saving for a deposit – which by the way does not have to be the full 20 per cent, it can be as little as 5 per cent – but you’re also saving for the stamp duty, fees associated with the loan, inspection reports and moving costs.
Arm yourself with as much knowledge as you can about property finance, know the difference between fixed and variable home loans, seek advice and plan for the added costs that will pop up.
4. You will change your mind, and that’s ok.
Every home buyer has a checklist for what they’re looking for in a property, and what that checklist looks like at the beginning of the property search can, and will, look different towards the end of your property search. The more open for inspections buyers visit, the more they realise what’s within their budget and what they’re willing to compromise on.
From the get-go, it’s important to know what your non-negotiables are – the number of bedrooms and bathrooms, accessibility, parking, yard size etc., keeping in mind your current and future lifestyle needs. This will save you a lot of time looking at properties that don’t tick these boxes.
5. Be honest with how much your day-to-day lifestyle is costing you.
Knowing how much your lifestyle is costing you is an essential piece of the puzzle. It will help you determine how high your willing to let your mortgage repayments be. Unless you track your day to day spending, it can be difficult to gauge how much you’re really spending.
Track how much you spend, from the morning coffee to the grocery shop to one-off purchases. This will give you a good understanding of how much your lifestyle is costing you. Flag what are necessities (rent, food, bills) and what are extras (subscriptions, a new outfit, spa treatments) as you may want to forgo some of the extra expenses for the time being to help with your budgeting.
6. You probably won’t land the first property you put a bid or offer on.
When it comes to putting your first offer on a property, whether it be through private treaty or at auction, it’s nearly impossible not to be emotionally invested – it’s exciting and nerve-wracking all at the same time. Mentally, you have probably even moved in and selected the new colour scheme.
Unfortunately, it may not go your way, and you can be left disappointed and disheartened with being outbid. Brush it off and keep an open mind about other properties as there is always new stock coming onto the market.
7. Building and pest inspections, they’re essential, and they always find problems.
When buying a home, building and pest inspections are critical as they provide you with invaluable insight into the condition of the property. They report on structural, drainage, plumbing, termite and roof issues – valuable information that you want to be across before putting an offer on a property.
What you need to remember is, every building and pest inspection will find problems. See the minor issues as leverage for when it comes time to negotiate and focus on the significant issues as they can be costly and time-consuming to fix. You will also likely be forking out money for a few building and pest inspections throughout your home buying journey, so work with experienced professionals who have your best interest at heart, not the vendors.
8. Everything is open to negotiation.
Negotiation is one of the most invaluable skills when it comes to buying and selling real estate. Why? Because pretty much everything is open for negotiation, from the final sale price to the settlement period, to the home’s fixtures and fittings. Don’t be afraid to ask the questions about what is and isn’t included, why the owners are selling, how long the property has been on the market and so forth. Find out as much as you can and use that information to your advantage.
The most significant part of the negotiation phase is the final selling prices. If you’re not confident in negotiating, get someone who is and who can separate the emotion, whether that be a family member, a friend or a buyer’s agent.
9. Buying a home takes a lot longer than you think.
There is no set period around how long it can take to buy a home. Some people have secured their first home within a matter of months, others have taken up to a year or more. Every home buyers’ journey is different. Know what your needs and budget are and take the time you need to find the right property. Just be flexible and ready to act quickly when the right property does come along.