FIRST HOME OWNERS - PART 1
Buying your first home can be a stressful, rewarding & an exciting experience for people of all ages.
When I think about buying a property I imagine my dream home, a stunning home with beautiful views. But in this current day and age is that really a reality? Weather buying or building your first home there are many factors that need to be considered.
For example, and a main point that I have found is important to start with is ‘how much can I afford to spend?’. Its easy to get an estimated home loan amount using calculators online but I feel as though its not as informative. You’re not sitting down with a professional learning about the types of home loans that would be ideally suited for your situation. Nor are you learning about deposits or interest rates. However, it is a good place to get an idea.
When doing a Live Interview with @ Real Estate Yeppoon’s Principal and also sales agent, Natalie Gesler, about the process of buying a first home it answered a lot questions I had about the procedure.
During the interview Natalie talked about having ‘3 VIP’s’, three Very Important Professionals. Natalie goes on to explain the VIP’s every first home owner should equip before starting the buying process. First and for most, engaging a “Supportive Sales Agent” is a must. Professional Sales Agents will take into account all your requirements you may have when purchasing your first home and best match you the appropriate homes suited for your budget.
Next it is important to have an experienced Lending Manager or Mortgage Broker to provide you with guidance and advice as you prepare yourself for purchase but also suggest finance options to potentially save you money and hopefully make your dream a reality.
Natalie explained from her past experienced from purchasing and selling Real Estate it will be a great idea to arrange a meeting with a Lending expert in the early stages “maybe whilst saving a deposit” Natalie says. An expert lending manager or mortgage broker will work with you and offer advice and guidance to help you place your best foot forward when apply for finance comes about. Natalie encouraged to “Remember to be careful where you get advice from, many people will be quick to share their personal stories which is great, but remember that every bodies situation is different and it is important to seek professional advice that is tailored to your situation”.
Finally, a ‘Sassy Solicitor’ is a must to help guide you through the purchasing process.
Natalie made some points in how to make sure the VIP’s are an expert in their field and will help make the buying process a reality
The biggest clue will be the quality and quantity of questions they ask.
- Are they professional?
- Do they have any personal experience with property?
- Do they include you in the process?
- How quickly do they return your calls and emails?
- The quality of information they provide?
Communication is the key to any good relationship.
I then went on to ask Natalie what the buying process is because let’s face it, having VIP’s is good a good starting point but what am I going to do with them if I don’t know what the next step is? In this point of the process being practical needs to be the number one priority. It is common to get excited and enveloped into the idea of buying a property that forgetting what you’re actually wanting in a property is pushed to the side and as a result it can be difficult to find the right home. Natalie suggested to start off by asking yourself “what do I want to buy?”. “Buying a home to live in should be like falling in love, you just know when you have found the right one” Natalie tells the situation perfectly.
Research. Looking into the area that ideally you would see you self living in. Maybe it’s a family friendly neighbour hood or maybe its close to town with restaurant, beaches, cafes or the night life is within walking distance or maybe its out of town on a bit of land to escape from reality and live in peace. Either way finding the right area to live in is a great starting point. Natalie suggested to Walk, Run or Ride around the area you would be interested in, she goes on to explain that you can take time and see much more of the neighbour hood at a slower pace.
Search. Now might be a good time to seek help from one of your VIP’s, the Real Estate Professional, they will help find the house that will tick all your boxes. Alternatively, to this option, searching online on some of the of the agencies websites or on realestate.com.au or domain.com.au where you can use filters to tailor to your dreams. Make sure to contact your agent to book an inspection through the property.
Lastly Inspections. Make sure to take you time when inspecting property. You want to make sure that the house is fitted for your needs and lifestyle. Ask you agent any questions you may have.
I continued to ask Natalie a different type of questions. Would it be beneficial to build / buy new or buy a property already established? Natalie answered like a professional. “Wow, this is a how long is a piece of string kind of question. Once again everyone is different. There is no right or wrong. There are many factors to determine if building or buying established is better”. Some points to consider might be;
- Affordability – Can you afford to build a new home or would you be better off buying an established home as a stepping stone. Remember its your first home, not your dream home. It’s a bit like buying a car, did you buy your dream car as your first car or did you buy something practical and affordable until you could afford a better car? Once again your Lending Expert will be able to help you decide what is right for you.
- Time – Building can take 4 to 12 months, can you wait that long? And building takes a lot of time and effort, are you prepared for that?
- Location – Generally if you build you will be building in a new estate. Would you prefer to live in a new estate or an established community?
Say you’ve found the house of your dreams and you feel as though you are ready to make an offer on the property. Negotiation is a big part of this process. I asked Natalie some tips she might have when the negotiation part of the process begins. “There are many negotiation strategies out there, only a small few are effective” Natalie tells.
“I have noticed the best success comes by following these simple steps;
- Do your research and work out your budget, so you know how much you can afford to pay.
- Take a step back and remember why you are buying, is it investment or personal.
- Consider the seller’s situation.
- Look for a win win for everyone. What can you offer to help the seller achieve their goal? Maybe you could offer a larger deposit to show you are keen and demonstrate you have some money behind you, maybe a shorter or longer settlement time would benefit the seller.
- Honesty is the best policy, explain your situation to your Real Estate Agents.
Keep the lines of communication open and honest” Natalie finishes.
What is an easement? Does it affect the property and its value? Natalie goes on to explain “It is a usage / access right over a part of the land, often for sewage lines or maybe access to a rear block of land. Most easements are harmless, and might mean for example that you can’t build over the top of the sewage line. However, it is important to always full understand what it is you are buying”.
Once all the negotiation is done and everyone is agreeable signing the contract to finalise the purchase comes next. I asked Natalie if there was anything buyers need to look out for when the contract signing comes about. Your agent will arrange a standard contract for all parties to sign and will provide you and your solicitor a fully signed copy for records. @ Real Estate Yeppoon use REIQ (Real Estate Institute of Queensland). Natalie explains, “In Queensland, you can negotiate to have your contract subject to finance and building and pest inspection, usually 14 days”. By this point of the buying process you will be required to make a deposit into your agents Trust Account as well as finalise your finance, organise your Building and Pest and arrange insurance for the property.
Organising a Building and pest inspection is important but why is it apart of the buying process? Natalie explains “At @ Real Estate Yeppoon we always recommend a building and pest inspection, so you know exactly what you are buying. Your agent will be able to recommend a local building and pest inspector”.
Once the contract has been signed and distributed to you and your Solicitor, you will have the time specified on the contract to complete obtain finance and complete the building and pest inspection. “It is during this time your lender will complete the property valuation and provide unconditional approval for finance.
Once all of the conditions on the contract have been satisfied the contract becomes unconditional” Natalie clarifies. Followed is the settlement date, generally is 30 to 90 days after the contract date. “This is when the seller hands over transfer documents and the buyer pays the contract price and takes position of the keys and property” Natalie says.
I asked Natalie if there are any other tips or tricks she would recommend to first home buyers, “Buying a home to live in, it should be like falling in love. You just know when you have found the right one. Trust your instincts”.
@ Real Estate Yeppoon