If you're considering buying your first home and need expert advice, Mark Lewis shares his top ten tips
Ten tips for buying your first home
If you or someone close to you is about to take that giant leap into home ownership for the very first time, then congratulations! You have just made a very important first step in securing your financial future.
Before you make the leap however, here are my ten tips for buying your first home.
1. Get your finance pre-approved
Do this before you start looking. That way you will know exactly how much you can afford and therefore what price range properties to look at. After all, there is no point wasting time looking at $600,000 homes when you can only reasonably afford a $450,000 home. Pre-approved finance will also give you a bit more negotiating power and confidence when it comes time to submit an offer on a property you do like.
2. Decide what you can afford
Sometimes there is a big difference between what the Bank says you can afford and what you are happy to pay in repayments each month. So make sure you do a budget and work out what you can reasonably afford in repayments each month given your normal living expenses.
3. Properties to avoid
If you are buying an apartment then avoid anything on a company title, sometimes called a purple title. They can be a real problem and reduce your rights to utilize the property in the way you want. So stick with strata title if buying an apartment. Also avoid apartments in sub standard locations. They are probably cheap for a reason.
4. How to buy where you want for less
Have a look at the next suburb over from the popular one. By buying in the next suburb you will often pick up an equivalent property much cheaper as well as potentially benefitting from some increased capital growth in a shorter period once the popular suburb out-prices the market and more buyers start looking in the neighbouring suburb. This is called the spillover effect.
5. Looking for potential
Not everyone is house proud and not everyone prepares their property for sale to look like the cover of Better Homes & Gardens magazine. So whilst this may put some buyers off, if you are prepared to look beyond the mess or the peeling paint, there may well be some serious potential if you are at all handy, you may pick up a real bargain.
6. Features to look for
A functional floor plan, lots of natural light, good block size (if it’s a house), off street parking, quiet suburban street, close to parks, shops, schools and transport are all good things to look for. Another tip if you are buying a house is to buy a minimum three bedroom house, even if you don’t have children. This will mean a larger group of potential buyers come time to sell.
7. Get a pest and building report
I strongly recommend getting these inspections done, either before an auction or as a condition on a private treaty sale.
8. Buying at Auction
If you feel too intimidated to attend an auction or don’t trust yourself to stick to your bidding limit then get someone to bid at auction on your behalf. If you have any contract amendments, variations on standard deposit requirements or alternative settlement terms then these need to be advised and agreed to by the vendor prior to the auction.
9. Bidding at auction
I’m sure you have all heard a multitude of tips for bidding at auction. Frankly there is no right or wrong, just make sure the auctioneer can clearly see you, your bids are clear and confident and you stick to your limits. And if your limit is $1 higher than everyone else bidding then you will win the auction.
10. Buying via private treaty
Again there are lots of people with different opinions on how to make an offer on a house. But again, the most important thing is to not exceed your budget and only offer as much as you’re prepared to pay.
Mark Lewis is the Managing Director of Bernie Lewis
This article is for general information only. Since everyone's personal financial situation is different this article can't be taken as financial advice. If you would like to discuss this article further or how it could relate to your personal financial circumstances please give us a call on (08) 8300-8300 so we can discuss it with you in more detail.