Key Tips for First Home Buyers

Buying your first property can be an exciting, terrifying and confusing time. For most buyers, a property is arguably the most significant financial decision you’ll ever make and whilst it can be a time of celebration, first home buyers should also proceed with caution.

Unfortunately many first home buyers can easily make mistakes due to their inexperience and emotions. Some of these mistakes can end up causing disastrous financial consequences. However, it shouldn’t be all doom and gloom – we’re here to help get you through this life changing experience.

Some of our top tips for first home buyers are:

  1. Beware of the real estate agent

Yes, we more often than not need a real estate agent to help us find the perfect home, however keep in mind they may not always be working in your best interests. They are there to sell their client’s property and to make some cash for themselves. Whilst it may seem harsh to compare them to your typical car salesman, you may not be able to take everything a real estate agent says at face value. If they claim that pets are allowed in an apartment complex, it may be best to double check with the Owners Corporation or Body Corporate.

They may also say such things as an off-the-plan apartment will be a certain size; if so, it’s best to ensure that it’s written in the contract. Also be aware if they start to rush you and tell you to hurry and sign the contract “before it’s too late” – always have a lawyer look through the contract first.

It can be tough as a new home buyer when you’ve found “the one” and your heart is set on it, but in order to avoid any nasty pitfalls, make sure you remember that new properties are constantly being placed on the market every day of the week and that it’s not worth risking your financial security by being reckless and rushing. Take the plunge when you are ready.

  1. Check, check and check again

Whilst it’s great to dream up some grand plans for the future, don’t always assume these plans are legally possible. It’s best to do your homework in advance and find out what you can and can’t do. For instance, if you’re thinking about knocking down an old house and building a new one, check with the Council that this is permitted under the planning scheme and make sure you know if there are any easements that you could be prevented from building over. If you are planning to run a business out of an apartment, check that the Owners Corporation or Body Corporate allows this.

Furthermore, if you’re buying an investment property, get an independent rental appraisal. Be armed with all the information you need in order to make an informed decision and to avoid any shock surprises.

  1. Be cautious of off-the-plan apartments

Spacious and well-lit display units along with artists’ impressions of a finished product are not an accurate representation of your finished off-the-plan apartment. The fine print of the contract will make it clear that you can not rely on what you see in a display unit. In conjunction, it can be difficult to obtain finance for some smallish one bedroom apartments. Its best if you aim to have the contract specify as much detail as possible about the fixtures and fittings.

Also remember that the developer will have the right to substitute these for similar brands, which is why it is important to specify a quality baseline brand. Off-the-plan developments can take up to five years to finish and the contract will specify a “sunset” date. SO, whilst the agent may say that it’ll take “x months to complete” be fully prepared for the full period to run as set out in the contract.

  1. Inspection is crucial

When purchasing an existing home, the condition that the property is in on the day that you sign the contract is the condition you should expect to receive the property.

If the air-conditioning wasn’t working on the date of sale or the oven doesn’t turn on, too bad. By turning on all appliances, checking all light fittings, flushing all toilets and turning on all taps, you will be given an accurate picture of the state of the property. Look closely for newly painted gutters and window sills – are they masking rot or rust? Feel free to jump up and down on wooden floors – are they squeaky and uneven, indicating stump damage?

You could even chose to connect with an independent building inspector and/or pest controller to examine the property for invisible but expensive problems like termite infestation.

By knowing exactly what you’re in for can result in you, the buyer, having an upper hand when negotiating a private sale, and at the very least you’ll know how to plan your budget for repairs.

For more information on buying your first home (or second, third, forth home) contact us on 02 9299 7044 or via admin@clarencestreetmortgages.com.au

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