Buying a house, especially your first home can feel incredibly exciting, daunting and confusing all at the same time. Even if it’s not your first home it will probably have been some years since your last purchase and you may need a refresher on the steps to buying a house.
My aim with this buying a house checklist is to help you navigate your way through what can be an incredibly confusing but also a very exciting time.
Once you know the process and have all your ‘ducks in a row’ you’ll be heading into negotiations with confidence!
How to buy your first home
It’s hard to know where to begin when buying a house.
Firstly conduct some market research on your area of choice. Attend some open homes and do some online research on sites like realestate.com.au and domain.com.au. Both of these sites provide an overview of most suburbs within Australia, the population, the average age of residents, median prices for houses and units, the average time it takes for a property to sell in that area and the number of homes sold in the suburb for the previous 12 months. Many suburbs also have a livability score out of 10. This gives you an indication of what the locals think about where they live.
Steps to Buying a House – The Process
Arrange finance. Should you get your finance arranged first or have a look at a few homes and then get your finances arranged? It’s a personal choice really. Most buyers that I meet start looking around before they secure finance. They do a bit of research and then speak to the bank or broker about how much they would like to borrow. There is no right or wrong here.
The only risk you run is finding the home of your dreams and then missing out on it because you don’t have finance in place. (We’ve all been there, yours truly included). But remember there will always be another home come up and it often turns out to be the better choice.
This leads me to another point. If you’re out looking at properties, be honest with the agent about your financial situation. Let them know that you are just starting out. Explain that you’re in the early stages and don’t yet have finance arranged. You are likely to meet agents multiple times at various open homes. Find a few that you trust, by letting them know your situation they will be in a better position to help you through the home buying process.
Good agents will typically follow up with you on a Monday or Tuesday following your Saturday Open Home inspection. They do this for a couple of reasons, a) to see if you have any interest in the home, b) to see if there is anything else that they can show you that might be of interest and c) to ask for feedback about the home that you inspected. This helps the agent with pricing and allows them to pass the market (buyer) feedback to the owner.
First time home buyer advice for buying a house
Buying a house is usually the biggest financial commitment that you’ll ever make. Before you get too far down the research road you’ll want to speak to a home loan mortgage broker about your home loan finance.
Why you should go straight to a broker when buying a house?
Mortgage brokers can usually give you several finance options. They work with a large number of lenders giving you choice and flexibility. for example, if you’re self-employed a broker will be able to advise you of which lenders your application would sit better with.
Brokers can play one bank off against another and can effectively shop around for the best deal for you.
Banks, on the other hand, are individual entities. If you don’t fit into their box then your loan application will be declined. A good broker will shop around before submitting your application to a particular lender. this reduces the possibility of a declined application on your credit file which nobody wants!
I have personally used Daryl Wright for all of my mortgages since 2013. I’ve also referred countless clients to him. He has a wealth of experience and I highly recommend Daryl’s services.
Ok, you’ve done your research, you’re comfortable that you’ve got a handle on prices in the area through attending some open homes. That’s when things become exciting! You can go out looking for your new home knowing your budget.
The scary (and exciting) bit!
Making an offer.
Once you’ve found the home you want to buy you’ll then have to make an offer. There will often be some negotiations via the agent before price agreement is reached. At this point, the agent will ask you how you want to proceed. In NSW the options are office exchange or solicitor exchange. You’ll also be asked for your solicitor or conveyancer details. I will expand on this in an upcoming post. To be notified once it’s published, click here.
Is your dream home scheduled for Auction? Learn more about buying a house at auction or download my free guide here.
Solicitor v Conveyancer – which is best
In a very basic sense Conveyancers specialize in the transfer of property ownership from one party to another. This is their core service. Solicitors, on the other hand, cover a range of legal services such as family law, criminal law, worker’s compensation, wills, and probate, etc. Generally speaking, conveyancing fees are usually cheaper. If you don’t require these other services than a conveyancer is often the way to go.
Some solicitors offer a conveyancing arm to their businesses which are also fairly reasonably priced. One such company is GMS Legal, another is Direct2U Law and Conveyancing
Understand the terminology of buying a house. Several terms and processes will probably be unfamiliar to you as a first home buyer. Terms like ‘cooling-off period’ 66W, exchange, unconditional and settlement are all explained here.
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