Finding a home to call your own – and actually finding a way to pay for it – brings unmatched levels of excitement. We call it the ‘first-home buyer buzz’.
The flip side of the first-home buyer buzz is that it can encourage a little forgetfulness when it comes to the more mundane and tedious parts of buying a home.
If you’re tempted to jump straight into the decorating or housewarming arrangements before the basic admin is locked down, you’re not alone.
We spoke to buyer’s agent and founder of Aus Property Professionals, Lloyd Edge, to find out which common steps first-home buyers tend to overlook, so you don’t!
When you buy a home, it can often feel like you’re bleeding money. Not only do you have a potential 30-year mortgage hanging over your head, but you then need to pay for pest inspections, building inspections, lawyers – the list goes on. And this is all pre-settlement!
After you’ve secured your dream home, there are even more costs like stamp duty, council or strata fees, insurance, real estate fees and everything in between.
The answer? Do your research ahead of time.
“Whenever people are searching for a property, they should always be asking for outgoings from the real estate agent of the property they’re viewing,” Lloyd advises.
“Not only the council rates but the water rates and strata fees if they’re buying a unit. This is an added monthly fee they’ll be paying on top of their mortgage, which can shock some people.”
On the note of extra costs, Lloyd finds people can occasionally make the mistake of maxing out their mortgage on the price of the house alone.
“They’re going to need a lot more than just the deposit on the property and the base mortgage repayments,” he says.
“People really need to be doing a budget, separate to their bank. Banks and lenders will look at your expenses for your mortgage, but what you can actually afford in reality might be different.”
Especially when you stumble upon those aforementioned extra costs.
Having a fantasy of your dream home is a double-edged sword. On the one hand it can lead you to never finding a property because you’re unwilling to compromise on certain visions. On the other hand, it can lead you to rushing into buying a home you’ve become emotionally attached to, but may have other flaws.
Remember to think logically, be methodical, do your research and don’t get swept up in the aesthetics over the foundations.
And always, always, get a building inspection.
Another side-effect of first home buyer buzz can be failing to strategise your property purchase. Lloyd says research is the most important factor in overcoming this mistake.
“You really need to understand comparable sales in an area,” Lloyd notes.
“Decide where you want to buy your property and then look at what properties are selling for in that area, what they’re worth, and consider looking into some statistics around how much vendor discounting is going on. If it’s a buyer’s market like we’re seeing at the moment, how much of a discount might you be able to get?”
Doing your due diligence on an area can help you avoid falling for any misinformation from the seller’s agent – and might help you avoid constant disappointment at auctions. A buyer’s agent can also help in this department as they do this research and negotiating on your behalf.
You’ve found your home, you’ve signed your contracts, you’ve paid all those extra costs – or have you?
The last thing you want is for something to happen to the most expensive purchase you’ve made in your life, which is why you need to get home insurance sorted before you’ve moved in.
“Depending on your state, and your individual contract of sale, you may need your building insurance to be effective from settlement date or as soon as contracts are exchanged, so it’s important to check what applies to you. Your solicitor or conveyancer should be able to tell you what applies,” Youi Head of Home Product Chris Hope explains.
“Of course, you only need contents insurance at the new address once you move in with your belongings.”
Once that’s sorted, it’s time to pop the bubbly and celebrate your first home! If you’re still worried you’ve forgotten something in the excitement of it all, listen to what your friends and peers have to say. A simple conversation can go a long way.