First things first – Finance
If you’re thinking of buying a home, you should be thinking about finance. Your first step is to speak to a mortgage broker and your bank. This enables you to compare options and will give you a guide about how much you can borrow, the level of the repayments and the deposit required to get you started.
Now it’s time to do the maths – working out a budget is essential. Before you make an appointment to see a lender, you need to know exactly what you earn and exactly what you spend. Only then can you work out what you can realistically afford to borrow and the cost of your mortgage repayments.
When doing the calculations remember to factor in things like Council and Water Rates, Utilities, Strata Fees (if appropriate), Insurance as well as your normal living expenses and any existing debt.
A good guide is to check your credit card and bank statements for the past year. This will provide an accurate snapshot of what you spend. It’s only then that you can work out if and where you can make savings and prepare a budget.
Be smart – Pre-approve your finance
Sellers love a buyer with pre-approved finance. It demonstrates that you’re serious, may help you to negotiate a better price and avoids the disappointment of missing out on a property due to finance being declined.
Be aware – It’s not just the purchase price
There are costs associated with buying a home that must be included in your calculations before you make an offer. These include:
- Bank and loan approval fees
- Stamp duty
- Settlement agent fees
- Council and water rates (calculated on settlement for the balance of the year)
- Removal costs
- Pest and building inspection reports
Be informed – Tips for finding a home
We all have technology at our fingertips so it’s no surprise that the internet is the preferred way of finding out what property is available. Real Estate websites give you a feel for the market, provide images and details of the property and importantly, a guide to the price or price range. Other options include:
- Newspapers: The West Australian – Sunday Times or Community Newspapers
- Listings in an Agent’s window
- Home opens
- Letterbox leaflets from Real Estate agents
Be shrewd – Tips for when you have found your home:
- Always include a termite certificate report and (in some instances) a building inspection report as a condition of the contract.
- Also include a clause to have all the electrical and plumbing appliances checked and where applicable pool equipment to be in good working order.
- Arrange for a pre-settlement inspection, things are hard to rectify once the deal is done.
- Contact the local council before you settle to ensure that any extensions or modifications have the correct council approval. Future liability lies with the owner.
- If you are looking at a strata property, check the quarterly strata levies and the minutes of the meetings to ensure there is no major work to be carried out that you will have to pay for in the near future.
- Once the offer has been signed and accepted make sure you keep in contact with the Real Estate and settlement agents until the documents have been signed.