6 Tips for first Home buyers | Pre Purchase Inspection Melbourne

The tips for first home buyers helps inexperienced individuals, couple or families through the tumultuous journey. The property market in Australia is on the boom and property prices have soared 19% in the last year. Most of the industry pundits are predicting the trend to continue in 2021. The surge in Australian house prices has made the major banks predict 20% to 30% rises in property values around Australia and the strong growth to continue for some time. (Source)

Although first home buyers are lagging behind in this race cause of the rising prices first homeowner grant comes as a helping hand and making the dream of buying the first home possible.

There are many things to consider to take the plunge. Building Inspection Council has observed that If you have done proper preparation, then you have all the chances of getting what you want and at the right price. Following are 6 tips when preparing to buy your first home:

1. Be Realistic:

The very first tip for first home buyers is to be realistic. Everyone dream of a big sea-facing mansion with a private beach, but it is always better to be in touch with your reality. Learn how much you can afford and what are your requirements. Differentiate between must-haves and nice-to-haves. At this point, you should consider the size of the property you need, the number of rooms, type of the house you are comfortable with.

One of the best practices is to plan your budget and live on it for 3 months. That way you will ensure that loans do not become a burden and you can live a life of your choice.

There is no use in looking for properties that are way beyond your budget. You will be wasting your and other people’s time. Buyers with the clear and realistic plan are less likely to suffer from the stress and regret later.

2. Set A Budget

Calculate your budget with monthly payment, monthly income, and future scope in mind. The budget includes price, deposit, stamp duty, fees and EMIs.

Know your grant as government grants do help with the deposit. In Australia, there are first home buyer grants, stamp duty concession, first homeowner grants, and state government grants.

Your expenses consist of the purchase price, loan-application fee, lender’s mortgage insurance fee, Government fee, legal and conveyancing fee, Building and pest inspection free, Strata inspection fee, etc.

Set your budget that you can afford EMI of based on your future income. Make sure to keep some money for other emergencies.

3. Loan And Debts

The first step is to check any black marks on your credit history. It could affect your ability to get the loan approved. The lender will assess your credit rating against their policies.

If you already have got debts, especially high-interest debts like a credit card, car loans, store credits, focus on paying off that first. Another option is to consolidate those loans in your home loan.

Know about the different types of loans as loans can vary in terms of fees and interest rates. Evaluate the extra features provided by lenders such as allowing you to make extra repayment, redraw funds, use an offset account that can help you over time.

Get your loan pre-approved. So many times, Building Inspection Council have observed that buyer liked a house and even got inspections done only to find out that loan is declined.

The best way to get the best deals is to shop around. Gone are the days when there were only 4 big banks in Australia. Now the market is very competitive and there are 100s of lenders competing for your business.

4. Do Your Research

One of great tips for first home buyers is to do lot of research. There is no such thing as too informed when it comes to purchasing a property. Take as much time as required to know about the suburb and neighborhood you are interested in. The buyers who do their research and stick to the plan end up getting a better deal.

Research these days is easy and you can start with realestate.com.au and domain.com.au. To buy your dream at the right price- consider:

Price of properties in the suburb you are interested in.
How far you are happy to live from work, family, and friends.
If off-street parking available.
Amenities like schools, shops, and transportation.
If the property needs any repair or renovation and whether you have funds for that.
Chances of problems like flood, dampness, and termite.
Price growth potential of the area.
Any proposed development in the area that can impact the value of the property.
The crime rate in the area.

You can take the help of your real estate agents. You can consult with local building inspectors for common problems in the area. Different people have different preferences so consider what best works for you.

5. Hire A Good Conveyancer

A good conveyancer can save you a lot of trouble. The conveyancers are your legal representative during the transaction. They support you and inform you about the things to be wary of in the title and documentation. It is better to hire the conveyancer in the early stage as you may need them at short notice. Following are 5 tasks which a professional conveyancer will do:

Prepare all the documentation: One of the main tasks of the conveyancer is to prepare all the documentation required for property purchase. This involves running a range of property and title searches.
Review the contract: The conveyancer reviews the wording of the contract and warns you if there is any deviation from the standard contract.
Arrange financial adjustments: Your conveyancer calculates any payments made by you for the property that you are not supposed to and adjusts those in the final payout.
Transfer the property ownership: Conveyancer prepare all the transfer documents that enable the transfer of the property to be legally transferred in your name.
Attend Settlement: Your conveyancer coordinates the settlement time and manages the property transfer, paperwork exchange, and handover of the cheque.

6. Learn About Property:

Last of the tips for first home buyers is to learn more the property. When it is about the biggest investment of your life, it makes sense to surround yourself with experts. Hire a competent and licensed building inspector to report any issues in the property that could potentially become costly repairs.

Research suggests that all the properties have building defects. Building inspection of the property will warn you of major issues that are not detectable to the naked eyes such as water leaks, damaged roof, structure damage, termite, and serious plumbing issues. These issues can cost you many times more than the building inspection cost.

If you are not happy with the building condition of the property then you can pull out of the contract under the “Subject to building inspection” clause

if you are considering an apartment or townhouse then a strata report can help you with information on whether the property is well maintained and adequately financed.

A building inspection and strata reports are precautions that can protect you from the expensive cure in form of costly repairs to hidden building defects.

Buying your first home should be fun and enjoyable if you do all the right things and follow these tips for first home buyers. A building inspection is one of the tools on your side if your hire an independent and competent building inspector. Building Inspection Council is a not-for-profit organization that helps property buyers with free quotes from your local expert building inspectors. The best thing about being not-for-profit is that we do not have to compromise for profits and the community gets genuine and honest quotes. For free quotes, Click here.