Steps to Buy a Home in Australia
Huge investment is required in buying a home in Hampton Park or nearby suburbs. Buyers invest emotionally as well as financially. The process of home buying is probably one of the most life-changing decisions. It is a big decision and requires careful considerations.
Whether you are a first-home buyer or you are looking forward to buying an investment property, the process includes extensive research.
But apart from that, you would also need to follow the steps explained.
We have put together a ten-step guide to help you navigate the process of buying a home.
“Look Before you Leap”
This holds really true when you are buying a property.
Before you leap into finding your dream house, just take a breath and ask yourself a big question i.e., Am I ready?
If you still feel that you are not satisfied and are somehow experiencing itchy feet, it means you are not quite ready for the commitment at this time.
But, if you think you are all in and have everything in place, just go for it.
Check Your Finances and Budget
You must be wondering about the amount you can borrow from a bank. Good Question Though!
However, the answer to this question is determined by a number of factors.
A mortgage is a huge financial responsibility. To get a good idea of where you stand, it will be best to have an honest conversation with your accountant and figure out what you can actually afford. If you are aware of this you will be able to start searching for the property.
Consider the Cost of Buying a House
It pays to seek financial advice from a financial advisor, accountant or lender. They can truly give you a clear picture about the full costs associated with buying a home. Here is a list of costs you are likely incur
Legal and conveyancing fees
Finance and insurance costs
Building and pest inspections
Other costs that you must consider are ongoing mortgage repayments, moving costs, utilities, home, content insurance, council rates, strata fees, and mortgage protection insurance.
Extra Costs Involved When Buying an Investment Property
It is essential that you cover maintenance, property management, insurance, land tax, council and water rates, and body corporate fees.
Investigating Mortgages and Interest Rates
If you have your deposit ready, but you still look for something to shop around to find the right financing for you. Just be careful and make sure you understand all the terms of the agreement. Find out about the interest rate, term of the loan, whether you can redraw funds or not, can you make additional repayments and are there conditions attached or not, and how often is the interest calculated?
If you do not have a deposit saved, full finance of the home purchase price may be an option by using your renting history of savings as a proof.
There are two types of interest rates - fixed and variable.
Your financial advisor will help you in deciding the right option for you.
Get Home Loan Pre-Approval
Also known as conditional approval or approval in principle, securing pre-approval loan even before searching for your home is ideal because you will get to know the price range.
All that you need to do is- provide your bank or lender with your financial details like credit report, income, investments, and savings.
They are the professionals who will help in reviewing the information and granting you with pre-approval to borrow up to a certain amount.
Choose the Suburb and Type of Property
What kind of area or location you want – have this clear in your mind.
Also, decide what type of property are you looking for.
The list of priorities may vary for singles, investors, and those looking to purchase a family home.
Make a checklist of all your non-negotiable, “must have” requirements. Like:
Access to public transport
Is there established infrastructure?
Also, figuring out what type of property is right for you; a house, unit, studio, townhouse, or acreage.
Buying an Investment Property
In case of buying the investment property, the factors are going to differ. First of all, you will have to decide whether you want to fix it up and want to hold it or rent it out.
For strong capital growth, you would need to look for a property that will increase in value. This may take a while, but it is better to look for the areas with high rental yields compared to the property price, research recent sale prices, is there a strong rental demand? Also, look for tight vacancy. Look for the maintenance cost, number of bedrooms, bathrooms, and parking spots.
Do You Need a Real Estate Agent or Buyer’s Agent?
For this, you must reach out to the local real estate agent and get information on the tips for buying a house in the area, how the property market is performing, and so on.
Hiring a buyer’s agent is handy especially if you are looking to buy at auction. But they can also work to find suitable properties for you, negotiate with seller, and also complete the background checks on the property.
Conducting Property Inspections
As soon as you enter the home you are thinking to buy, you will get an immediate emotional response, either negative or positive. Just listen to what your instinct says. If you feel negative, just walk out and positive feeling, then it is time to think about the deal.
Watch for the following things:
Damp or mould spots on the ceilings or walls.
Doors and windows
Test the taps for flow
Check the floors
Take a look at sink
Check the hot water system
Roof, gutter, and drains
Exterior walls- check cracks, if any
Prepare for Purchase
A licensed conveyancer can request inspections and can also manage the exchange of contracts and other legal searches.
Once you have got the home you want to buy, just get a property valuation done so that you can figure out the right price.
After valuation, you will be ready to make an offer!
Decide about a figure, reach out to a real estate agent and let them know how much you are willing to pay your deposit amount.
In the next step, just exchange the contracts and pay the deposit.
Both you and the seller have to sign the contract which would include the names of parties, property address, purchase price, terms and conditions, special inclusions in the sale, and the date of settlement.
If you buy through a private treaty, you will have a cooling-off period but his will not be in the case of sale made by auction.
During the cooling off period, you can cancel the sale if you change your mind, but you may have to pay a penalty. The cooling-off period varies from state to state.
Between the exchange and settlement – generally, six weeks are there, and in this time, you should be arranging the balance of the selling price and should be finalizing the finance and signing of mortgage.
You may also want to ensure your property. For that, you will be required to take out building insurance.
Once you pay the balance and the stamp duty, the settlement of the property is done. After this, you get the keys and title deeds.
Move Into Your New Home
Now, you will be ready to move into your new place.
Sort out utility accounts
Pack your belongings
Employ the help of a cleaner (if you wish)
Do not forget to transfer the address on all your registered accounts
Organize for mail redirection too
FHB Grant (First Home Buyers Grant)
If you and your partner haven’t ever bought a property before, there is a fair chance that you are eligible to receive the First Home Owner Grant (FHOG).
What is First Home Grant?
FHOG is a national scheme but every state funds its own and the amount varies from state-to-state.
The government determines if you can receive the grant based on whether you have purchased a home or investment property previously, or whether your spouse or partner has too.
To get First Home Grant, you are required to submit your application within 12 months of purchasing your new home.