your To do Checklist Before Buying a property
Ready, Set, Buy!
Before you embark to the great endeavor of buying a property you must do some self reflection. To successfully move forward you must look back at what you already have, and if you feel secure then you should move forward. When you take the time to look back, consider these things first.
If you are buying a new house, look at your current lifestyle, then consider the future. Will you be expanding your family? If so consider where you are to live. Parks, schools, and travel systems should come into consideration. As well as this, take the time to pay off ALL of your debts, before you commit to such a large investment. Remember that on average 3% of your income goes on housing. This includes your insurance, maintenance, and other expenses. The average homeowner spends 1% to 4% of the original cost of the home each year on maintenance. Buying an asset you must remember on average the Australian home owner stays in his or her house for 7 years. So it is wise to think about future income, savings, and fixed expenses; before committing to a buy, or even beginning to look.
Become a perfect candidate
To become the optimal candidate for buying involves sorting out your finances. Firstly you must work out and examine your credit worthiness, as well begin to down pay all debts. It is often recommended that when buying house you already have 20% of the total worth of the property; however, if you don’t have this, 5 or 10 percent of the payment should often do well.
If you’re applying for a mortgage make sure that your have advised properly with your lender about future payments and explored all financial avenues, shop around for the right loan for you.
Get a letter of loan pre-approval
Obtaining a loan pre-approval, can speed up the mortgage application process greatly, and might mean the difference between obtaining your home loan and missing out all together. Most banks and lending institutions, it costs nothing to arrange and your mortgage broker will help you secure it. Your lender will look at factors such as how much you earn and your credit history in assessing your ability to repay the loan. From that your broker will then decided on how much to pre-approve. Your mortgage broker will help you to work out roughly how much you can borrow according to your objectives, your salary, and your existing financial commitments.
Find an agent who can help
89% of people buying houses still use real estate agents.
There are many reasons why hiring an agent can be helpful:
* Education and experience – A good realtor understands the complex procedure and paperwork involved in selling and buying a home. He or she has hopefully also gone through a licensing program.
* The market – A good realtor knows the market and understands trends, which can help your bottom line.
* Negotiation – An agent has the negotiating skills to help you get a good price.
* Professional contacts – Your agent’s contacts with other realtors and with contractors, inspectors, landscapers and the like can help you find a solution for any problem you may encounter.
* Sale price – In some cases, buyers will offer less money to someone who’s not using an agent, believing the seller is trying to save money by not paying commission.
* “Caravans” – Agents sometimes conduct open houses just for buyer agents where buyer agents arrive in groups (“caravans”) and check out the house. This is usually a quick process, is more convenient than a traditional open house and allows buyer agents in the area to tell their clients about your home.
Another benefit of an agent is that they have the ability to do multiple listings; where as you can only do single listings and pay far more for multiple listings.
Finding the right property for you – things to consider
There are many things to consider when you are buying a property.
Are you buying this property to live in, or as an investment?
An example of a four step strategic buying strategy is:
- Buy a property below its intrinsic value
- In an area that has a long history of strong capital growth or great potential for future capital growth
- Look for a property with a twist – something unique, special or different and
- A property potential for capital growth through renovations or redevelopment.
In addition think about what type of property you want, and what type of property you need. DO you need a balcony? Should I buy in the suburbs or inner city? Apartment or flat? These are all variables.
Furthermore something to consider is; when should I buy? You need to make sure that you carefully analyse the housing market before you engage an agent, you will feel more confident knowing the current market prices.
Value of property and current market prices
It is also important that you value the houses in the area you want to buy; this can often give you a good indication of what the house in question might be worth.
Considering flats and apartments, the principle applies here as well. Find out what the last flat to sell went for in the block in question, which will give you a good idea of your targets worth. During this process it would be wise to get a strata report and a land value report.
One of the most crucial steps in buying a house is CHECK OUT YOUR NEIGHBOURS! You are going to be living beside them for years to come so if you turn up and find and annoying yapping dog, a heavy metal drummer, or find your house next to a day and night construction site, you might want to think again. There’s an old Jewish proverb that simply states “Ask about your neighbours, then buy the house.” This advice cannot be valued and stressed enough. After all, even in prestigious zones, neighbours can make life heaven or hell, depending on how respectable and friendly the relationship is.
Inspect the Property
Make sure you do a thorough inspection of the property you want to buy. This includes;
- The kitchen eg: Vents & Drains, etc.
- Living spaces and bedrooms, etc.
- Bathrooms eg: Toilets and plumbing, etc.
- Roof & Exterior surfaces
- And the property grounds eg: Fences, gates, trees, walkways etc.
When buying a house as oppose to an apartment, it is recommended to get a structure report.
What are you willing to pay for it
Finally it is time to make your offer. Be careful when making your offer because it might reflect your budget so that others will glean how high to bid to beat you. Remember to look at current market conditions & and look at the condition of the home you’re about to buy; is it worth it? does it need work done and what it the total you would have to spend before you can live in it or lease it.
Sign the contract
It outlines the specific instructions for the transaction. Usually a deposit of between 5-10% will need to be paid on signing the contract. Make sure you have done all the checks,and you are happy with your the results so far? Then go ahead; however if you have any doubts turn and take a few steps back before signing.
Today you should get the keys to your new property. This is when all required events listed in the purchase agreement are fulfilled and the funds are transferred over to the receiving parties. Usually done by your lawyer.