Buying a Home
Buying a home can feel like a giant leap into the unknown, but there are plenty of things you can do to make sure you don’t fall into financial difficulties. Keep to your budget, put some money aside for emergencies, and take your time to find a place that feels like home.
Learn about how to make the home buying process go smoother for you. There are some important things to consider when buying a home.
Buying a Home Process: Checklist
Preparing to shop
* Research the market
* Work out what you can afford
* Financing – Choose the right loan for you
* Finding the right real estate agent
* Finding a property
* Negotiate a price
* Arrange conveyancing
* Have the property inspected
* Take out insurance
* Complete the settlement
* Moving in
The process of buying a property is slightly different in each state and territory. For detailed information visit the fair trading office for your state. Check out our resources page.
QLD – Office of Fair Trading
Basics of Buying a House
Do you think you’re financially and emotionally ready to buy your own home? Home buying can be difficult as it involves a complex process and needs a lot of preparations for it to be successful.
It’s understandable to feel a bit scared and nervous, especially if you are a first-time home-buyer, but you just need to be prepared and expect the worst and everything will be alright.
When it comes to buying homes for sale, it’s vital to know the basics. Knowledge can be a powerful tool and you can use it to your advantage. This article will discuss some of the basics of home buying that you need to know.
What you need to do is to assess yourself first. Ask yourself, “Am I really ready for this big step I’m about to take? You should consider everything before making any major decisions.
Even though having your own home has many benefits, it also has some drawbacks which may or may not have a huge effect on you. Be very careful as home buying is not for everyone.
Once you have made your decision to buy your own property, you should organize your money and expenses. Check your finances and know how much you can pay.
There are a lot of loan programs available out there, be sure to check them all out. You also need to find a lender, begin with your own financial institute, you should also consider some mortgage brokers.
Don’t forget to ask for a pre-approval letter so you can show it to the seller, which can give you an advantage during negotiations.
Some people think that a real estate agent is not necessary. However, it is wise to hire one. A skillful agent knows almost everything about real estate, an agent can give you assistance during the whole home buying process.
Many people have already committed a number of home buying mistakes. You can use this to your advantage and learn from their experiences. Through this, you’ll be able to avoid many common problems regarding real estate.
After you have chosen the house you want, you are now ready to write a purchase offer. Be sure to prepare it well, as the success of closing the deal may depend on it. It’s normal for buyers and sellers to make counter offers so be ready to negotiate.
Get a professional home inspector to check the property once you and the seller have reached an agreement. Knowing the condition of the home is very important so you’ll be aware of the problems if any.
Don’t forget to do a final inspection of the home a couple of days prior to settlement to make sure that everything’s the same as it was when you agreed to purchase it.
Finally, after you have closed the transaction, you can now prepare to move into your home. Dealings normally last from 30 to 60 days after you and the seller have reached an agreement, so be sure to make an early reservation with movers or a moving truck so as to avoid any problems.
Buying a Home for the First Time
It’s a long journey to get to eventually buying a home for the first time. Some people only become conscious of the journey when they’re at the point of shopping for a home and moving towards completing the settlement.
Probably because that’s where all the action begins. However, the journey is so much more than that and actually starts a lot earlier, from the time you start building up a good credit history.
Getting to know a few things about the home search can help you identify the challenges of buying a home better and address them as you go and work your way through the system.
Let’s say that you’re eyeing Sunshine Coast real estate as your dream home. In this day and age, a lot of people begin their home search online.
Some purists and staunch supporters of traditional methods may say that this isn’t effective, but since a lot of tools and websites are already being improved to give home searchers the information they need, many different services are actually proving quite useful.
These days there are websites that show updated real estate listings, photos of homes for sale, ratings for neighborhoods, and the likes. It doesn’t replace actually getting an agent and looking at properties, but it sure gives you a great place to start.
If you know how to search for them, you’ll know that there are a lot of great home searching tools available online which you can use to your advantage.
Determining what you want
Before sitting down with a real estate agent, it’s better if you already know what you want. This makes home searching easier for both of you. However, selecting the homes that you want out of the homes that you will look at will be challenging as you look at more properties for sale.
It’s best if you take pictures as you go and neatly file them so that you know which one is which. Take lots of notes about the properties that you visit.
Include information about potential improvements that you see, pros and cons of each property, your overall impression of the place, the information you gain about why the seller is selling, observations about the neighborhood and the neighbors, and important things such as those.
Sticking to one property
When you come to a point when you have already made up your mind about one property, just stick to it unless there’s a good reason to turn your attention elsewhere. You’ll find that there will always be a better house than what you are looking at.
At times it’s really best if you focused on a house that you really like which is in a good location and is within your budget. Looking around further, especially while in the closing stage, is very counter-productive and will only cause you to feel discouraged about your purchase.
List down the things you need to do
Your agent can help you understand the process better by creating a list with you and walking you through it. Learn as much as you can about the process so you can have a feel of whether it’s time to anticipate some issues or not. Also, you’ll never know when you’ll want to buy another house in the future. This would come handy then.
How much can you afford?
Work out how much you can comfortably afford to borrow without stretching your budget too far, making sure you have a buffer
Include all the costs that come with home ownership: up-front costs like stamp duty and legal fees and lender’s mortgage insurance, as well as ongoing costs like land and water rates, house and contents insurance, and repairs.
Many real estates websites online have mortgage calculator. You can also use the mortgage calculator on this website. You’ll find it on the right sidebar, check out the resources page.
Stamp duty or transfer duty calculators
One of the bigger upfront costs you may have to pay is stamp duty or transfer duty on your property.
Find out how much you will need to pay using calculators on the websites below. Also if you are a first-home buyer, check what stamp duty concessions you are entitled to. For other states check out our resources page.
Queensland Government and Queensland Treasury websites
Office of State Revenue
The Office of State Revenue (OSR) is part of Queensland Treasury. They are responsible for collecting state taxes, royalties and administering the Queensland First Home Owners’ Grant.
Home Owner Grants
The Queensland First Home Owners’ Grant is available for first home buyers who are buying or building a brand new home.
Transfer Duty and Concessions
When you sign a contract for your new home, you will also be liable for transfer duty (previously known as stamp duty). As a first home buyer, you might also be eligible for a transfer duty home concession.
Buying a Home Tips
Finding the right property
There’s no point looking for a waterfront mansion if you can only afford a boathouse. Once you’ve set your price range, identify the suburbs that have properties in that range, it will save you a lot of legwork. Go to the Australian Property Monitors: Home Price Guide to see property prices in different suburbs.
Finding the house you want.
Take your time and consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs?
Before you buy, arrange for building and pest inspections, and have the contract checked by a conveyancer or solicitor before you sign. Make sure the person inspecting your future home is qualified to do so, such as a licensed builder, architect or surveyor.
Struggling to get into the property market?
Widen your property search. Not everyone can afford to live in their ideal location. If you’re trying to get a foot in the market consider moving out of your comfort zone into an area you may not have considered before.
Areas further out from cities or towns can be good value for money and offer a great first step into the market.
Consider a smaller property
If you really want to live in a particular area you may have to start small and work your way up. Consider an apartment or a smaller house that you can add to over time.
Compromise on finishes
Properties that are dated or in need of renovation can be a cheaper option for home buyers. Look for a home that is structurally sound and then clean it to your standard. Add a lick of paint here and there to improve the look and renovate as your budget allows.
Costs Of Buying A House
Here are some costs you need to factor in, apart from your deposit:
Stamp duty can add 4% to the purchase price
First homebuyers might be eligible for a transfer duty concession
You’ll need to budget for mortgage application fees
Banks will levy other set-up fees
Get good legal and conveyance people
You need 20% deposit to avoid Lenders Mortgage Insurance
Home Inspection Tips
Through a general home inspection, you can see if there are any defects in the house, but it might not be enough. It’s advisable to get a specialized home inspection on a particular area of the home.
Knowing the Different Kinds of Home Inspections
By now, you’re probably in the process of home buying where you have already chosen the house you want from the available homes for sale. But before you close the deal, it’s important to have the house inspected properly by a professional.
Aside from the general home inspection, there are other kinds of specialized inspections you can get. Even though general home inspectors can detect the faults and defects in the house, there are some problems that may be beyond their expertise and requires an expert who specializes in a particular area.
An electrical inspection is one of the specialized inspections you can get. For instance, if the electrical box is faulty and it is too old that it does not meet the terms of the city code, you need to hire an electrician. A general inspector may be able to detect such problem but an electrician knows how to fix it and whether or not it should be replaced.
Lead-based paint has been banned since 1978 by the federal government, however, some homes built after that year may still possibly contain such dangerous chemical. For this reason, it is crucial to hire a skilled lead abatement contractor to make a lead-based paint inspection and have it removed.
Pest inspection must also be done to make sure the house isn’t infested with various wood destroying pests that can be found almost everywhere, particularly in warm places. Such pests include powder post beetles, termites, and dry-rots.
Another kind of specialized inspection you should get is a chimney inspection. Hire an inspector to check if the bricks inside the chimney are still intact or crumbling, and see if it has flue liners. Such skilled inspectors can also make sure that the smoke is released properly.
Air Conditioning and Heating Inspection
Almost all furnaces in houses have to be taken apart for it to be checked if there are any defects so it’s advisable to get an air conditioning and heating inspection by hiring an HVAC specialist, they would know if there’s any problem and of course, how to fix it.
Inspection of Square Footage
Public records may possibly contain errors so the square footage of the property might not be accurate. It wouldn’t hurt to have it verified. You can check it by yourself or have a professional appraiser take a look at it for you.
General home inspections normally check the house’s foundation and it can determine whether it was built on a raised foundation or on a slab. However, a foundation engineer can check if it is faulty and if the house is sliding, so make sure to get a foundation inspection before closing the deal.
Lot Size and Boundaries Inspection
The size of the property and its boundaries can be seen, in a plat map. By hiring the services of a professional surveyor you can have it verified.
Getting specialized home inspections are necessary and it is part of the process of purchasing real estate. Be sure to ask your agent for some assistance regarding with this matter. Through this, you can make sure that you’ll be getting what you have paid for.
How to Find Great Properties on the Beachfront
Many people like spending time on the beach. Many people have a dream to own a beachfront home so that they can enjoy the breeze and constant access to the beach any time that they want to go there.
Even people who don’t really think they like to spend a lot of time on the beach think of investing on a beachfront property because it undoubtedly has a lot of potential as an investment property.
Granted that beachfront properties are a lot more expensive than other types of properties, but they can give satisfying returns. Exclusive resort communities like Surfers Paradise can fetch much higher prices. Surfers Paradise houses come with a really attractive address.
Here are a few tips when looking for beachfront homes:
Consider the insurance rates
Insurance rates will be recurring expenditures for you after you buy a house. It’s important that you make sure your beachfront home is insurable.
Is it in a place that’s extremely far away from fire stations or police stations? Did you have the house inspected and does it show concerning damages that might make it uninsurable? If you’re not going to live in it on a permanent basis, you may need to pay more in terms of insurance premiums too.
Will you be able to keep your view?
Many people blow their money on a beachfront home without doing their research first. Then after a few months, somebody buys the vacant lot in front of their house and builds a two-story home that completely ruins the view they paid for.
It would help if you researched the building codes in the area, or if the property you want to buy is right behind a vacant lot.
What kinds of buildings can be constructed in the area? Will you be able to build a second floor on your house? Does the house have a wrap-around deck where you can enjoy the view from different sides? You’re paying for the view when you buy a beachfront home, so it’s in your best interest to keep the value of the property up by keeping the view.
Are there other fees you should know about?
When you buy a beachfront home in exclusive resort communities, expect that there will be fees to pay. Say for example that you invested in the Gold Coast real estate, you’ll probably need to pay a homeowner’s fee, fees to keep private access to the beach, and the likes.
It’s good if you can talk to prospective neighbors and see if you can get information about how much these extras will cost so that you can factor this into your decision. Beachfront houses in other areas may have lower fees, depending on the address.
Since these will be part of your ongoing recurring costs, you should at least get to know how much they’ll probably be.
One challenge that beachfront property owners face is soil erosion. That’s why it’s not advisable to buy property in an inlet or anywhere too close to the shoreline. It’s better to buy property a few rows away from the shore. When looking around for properties to buy, look out for properties that have mature vegetation around it.
For example, you’ll notice that some Gold Coast homes, especially in the south are made up of older houses. If these older houses come with old trees and foliage, this would help you keep soil erosion under control over the years.
Negotiating the Purchase of Former Rental Homes
A lot of people are proactively on the lookout for former rental homes as a potential real estate purchase. This is because rental houses are usually cheaper and are often situated in great locations, especially homes in good rental areas. Aside from that, landlords may be motivated sellers for several reasons.
One of the most common reasons why landlords may become motivated sellers is that they’ve run into trouble with tenants defaulting on their rental payments.
Habitually paying the rent late affects the landlord adversely if the landlord purchased the home and turned it into a rental property specifically to help them out with paying the mortgage.
At times it’s just that the landlord got tired of being a landlord and just wants to get rid of the property. Sometimes people focus on the possible profit when they become landlords, overlooking the fact that owning a rental property comes with a lot of responsibilities.
Tenants expect you to get things fixed immediately because they don’t want to be inconvenienced. There’s also a lot of things to think about when it comes to personal liability and the likes.
Some owners who have owned the rental property for several years already may have run out of tax deductions left on their rental property. In some situations, it makes more financial sense to upgrade to a newer home and just sell the old property.
While buying a former rental property and turning it into an owner occupied home may be a good idea provided some things are taken care of, it’s still important to keep a few things in mind. Let’s say you looked through Brisbane homes for sale and decided to buy Brisbane real estate that used to be a rental.
Here are a few things to consider:
Don’t skimp on the inspection
This isn’t true a hundred percent of the time, but a lot of times tenants don’t take care of the homes they are renting because they don’t own it. You have to be more meticulous when it comes to having the home inspected.
Any major repair should be brought to the attention of the seller immediately if this has not been declared already. Arrange for the repair before completing the settlement or renegotiate the price of the home if possible.
Visit the house without the tenants in it
Some tenants who are unwilling to move may consciously discourage you from buying the house by playing up its problems. It’s better to have all the time and freedom you want to inspect the house without having the tenants interfere with it or color your perception of the house.
If you’re going to have the house inspected by professionals anyway, there’s no need to fear about encountering hidden issues in the home.
Some defects are not worth haggling over
Some minor issues in the house can be easily resolved by a few quick repairs. However, major damages to the house like foundations and the roof take a lot more money to resolve. Depending on how much you’re willing to spend on this and how much you really want the house, it’s best to rethink the purchase if it involves major repairs.