Buying a home, particularly a first home, can be stressful. It can also be downright discouraging when there are stock shortages in most popular areas, prices keep rising and many listings are attracting multiple offers from competing buyers.
However, the answer is really not to give up and put your home purchase off until a later date, especially if you are a first-time buyer. The fact is that while home price growth may well slow down if there is another interest rate increase later this year, it is unlikely to stop, especially since there is still such strong demand and not a lot of new development at the moment to relieve the supply situation.
And the higher prices go, the bigger the deposit, home loan and monthly income you will need to buy your first home. In short, the longer you wait, the harder it will be to ever get into the property market.
This is not to say, though, that you should just jump in and buy the first property you see. Buyers today need to take a very systematic approach to securing the home they want at a price they can afford, so we suggest you work through the following steps before you even start house-hunting:
Make sure you are financially ready to buy. The first thing you should do is consult a reputable mortgage originator such as BetterLife Home Loans and seek pre-approval for a home loan so you will know how much you can really afford to pay for your new home. In the process of doing this you may find that you first need to clean up or improve your credit record before you can apply for a home loan. You will also be able to find out what difference it might make to the interest rate you are charged on that loan – and to your longer-term financial plans – if you could put down a bigger deposit before buying. Your originator will also be able to tell you how much cash you will need to cover the “hidden” costs of property purchases such as transfer duty, bond registration costs and legal fees.
Decide what kind of home you actually need. Think about your lifestyle and concentrate on finding a home to match. If you like to entertain, you’ll want a home with a well-appointed entertainment area. If you like to travel and don’t care much for maintenance, a townhouse in a secure complex may be more your style. If you’re handy and love DIY projects, an older property in need of renovation may be just the thing for you. If you are starting a family, you might want to acquire some extra space now so that you don’t have to move again too soon.
Approach reputable agents in the area in which you want to live. Their ears are closer to the ground than yours when it comes to new listings and they will be happy to try to match you to your dream home, especially if they know you are ready to buy and you can be specific about what you want.
At the same time, scour the online property portals and make use of their property price report services to compare actual sale prices in the areas you like, as well as their email and sms notification services that immediately advise you of new listings that match your search criteria. Pick out the ones you like and make appointments to view them as soon as possible.
When you decide on a home you would like to buy, work hard to make your offer the most attractive. Remember that even if there are several buyers competing for the home you want, you may not have to offer the highest price to secure the deal. Make sure the seller knows how much you like the home and how ready you are to buy. Keep contingencies to a minimum and be prepared to compromise on moving dates. Sellers want their homes to go to buyers who really appreciate them – but they also want trouble-free transactions.