The spring property market is fast approaching, and if you are looking to purchase a new home or investment, here are few tips to prepare you for success.
The key to a successful home purchase is using research and facts – not emotions – to make the right choice. The process may require patience, but here are three keys steps to helping you make the right decision:
1. Decide on your budget
Looking carefully at your finances will determine how much you can afford to spend on a home. Look at your income, assets and current debt level. Don’t be swayed by what a lender may offer you, it’s what your financial position says you can afford that matters. If your lender says you can repay $1,200 a month, but you know you are struggling with a rental of $1,000 a month, you probably know that you don’t need any more than you already have.
Don’t forget to consider the 10% deposit required to secure your home at purchase, plus legal costs and stamp duty – usually about another 7% of the purchase price will cover these amounts depending on rates in your state.
You don’t have to have a house in mind before you apply for a mortgage. It is a good idea to be pre-approved when you are looking for a home. It will give you the security of knowing that you have funding and the buyer will know you mean business.
Spend the time to find the home you want. Talk to your local PPG agent who can help guide you through the home search. Start by checking out neighborhoods and then narrow it down to a few streets. You should consider the schools, parks, public transport and lifestyle advantages.
When choosing between homes, look at the size, number of bedrooms and baths, design and amenities. Decide what your "must haves" are and what the "nice to haves" are. For example, you might be willing to trade a large kitchen for a swimming pool.
3. Negotiate the right price
Once you have the funding in place and have found one (but hopefully more) potential properties, you will need to either make an offer (private sale) or bid at auction. Even if a property is listed for auction, the vendor may be receptive to offers before. You will need to discuss with the agent representing the seller.
Whichever method you must use, don’t get caught up in having to get the home and lose sight of how much you can afford. You don’t want to pay more for the home than it is worth. Recent sales in the area will give you a fairly accurate guide to the home’s value. If you are bidding at auction, make sure you have attended a few before you bid yourself. This will help you understand the process and develop confidence. You can also choose to have a friend or professional buyer’s agent bid on your behalf.
Terms of settlement are usually outlined in the contract. It is recommended that an independent legal representative look over the contract before making an offer privately or at auction. Once the contract is signed, it’s a matter of waiting until settlement date when the bank, your legal representative and the real estate agent finalise the transaction and your dream home is yours!