Buying a house in Melbourne is a difficult task with many factors that must be considered to avoid a real estate money pit.
Buyers have to tackle saving for a deposit to maximize the value from financing to avoid costly insurance.
Obtaining sufficient financing to purchase a property that meets your living requirements for the next decade.
When selecting property buyer must consider potential issues like high maintenance fees, poor capital growth, low rental yields and paying above market value for property.
The lesser-known challenges of purchasing property include securing inadequate financing, unsuccessful auction bids, shortages in supply, and dealings with unethical real estate agents.
These factors will impact your financial outcomes once you take ownership of the property. So it’s wise to buy the right property first time around to avoid the headaches.
Common Errors Made by Homebuyers
‘Only 5% to 10% of the property on the market at any one time is suitable for long-term investment.’
Mark Ribarsky, Wise Real Estate Advice.
Buying property is one of the most expensive assets you will ever own.
Regardless of your lifestyle or property needs, if you’re an investor or a home buyer, eventually the property will translate into a resource for the next step in your life.
Hence, maximising your property purchase today will give you tangible and intangible benefits for the future.
Let’s look at what buying a bad house looks like:
- Too far from the action: To attract future tenants and home buyers tenants proximity to schools, shopping centres, employment, major infrastructure, walking tracks and natural amenities will make any property in any suburb attractive.
- High future maintenance: In 2024, the cost of any renovation can be substantial. A structurally sound property that has been well maintained through its life can save you allot of heartache and make ownership of property easier.
- Not the norm for the suburb: Buying an apartment in a suburb full of houses? Or a house in an area with only 2-bedroom units?Knowing a suburbs demographics and the type of housing they need is wise, it will attract future tenants and buyers, minimise vacancy rates and selling time on market, increase rental yield and sale prices.
- The property is too close to:
- The neighbours: If your sharing boundary’s, walls, or a roof line, you could be subject to living next to nosy neighbours that distract you daily.
- Main roads, train tracks or future infrastructure. If you analyse all the property sales in a suburb for a period to time you will notice cheaper property sales when a home faces a main road or train tracks.
- The price seems too good to be true. When a property is presented for sale ‘the devil is in the detail.’ Not doing the right due diligence when buying can cost you allot of money, inconvenience, or have trouble in re-selling. Be cautious if:
- The agent is selling with an Auction method of sale.
- A home has been for sale for more than a few months.
- Missing paperwork or council permits for any completed works.
- Minor signs of structural defects.
- A house that has been freshly painted.
- Real estate agents that are vague with details.
Additional Expenses in Purchasing a Property
When planning your finances for a property purchase, it’s important to account for several expenses beyond the property’s purchase price. In addition to your down payment, budget for:
- Stamp duty, as determined by the Victorian Government’s State Revenue Office, which varies based on the property’s value (a foreign purchasers’ surcharge may also apply).
- Fees associated with loan applications and other borrowing expenses.
- Fees for transferring land titles and registering mortgages.
- Potential charges such as council rates, water, electricity, or gas, along with body corporate fees if the property is part of a strata scheme.
- Legal fees and conveyancing costs.
- Expenses related to moving into your new home.
- Costs for any immediate repairs or renovations necessary before or upon moving in.
- Building inspection fees.
- Mortgage payments increasing.
Getting Help Buying Property
‘Two are better than one, because they have a good return for their labor.’
Ecc 4:9-12.
To ensure your property ownership journey is successful, you have to make the right moves pre-purchase.
To getting this advantage your advice needs to come from experienced fields like builders, real estate agents, mortgage brokers and solicitors. Each has an important role to play in your assets long-term success.
Home Buyer Grants
Grants for Homebuyers Various grants are accessible to individuals purchasing homes.
Permanent residents and citizens of Australia looking to buy their first home in the country might qualify for the First Home Owner’s Grant. Additionally, you could be eligible for a reduction in stamp duty.
For further details on these grants, it’s recommended to consult the website of the State Revenue Office.
Buyer’s Agent
Buyer’s agents are experienced real estate buyers that understand what makes an average property vs an excellent property.
They spend all there working hours looking at property that’s for sale and negotiating deals with real estate agents. In addition to their property experience they used to be real estate selling agents, hence understand the ins and outs of negotiating a property purchase.
Their role is to short list the best property on the real estate market. This includes property that is off market, inspect and conduct the due diligence on the property then negotiate a great price via an auction or private treaty negotiation.
If you’re considering buying a house in Melbourne, consider how a professional property buyer can ensure your success, contact Wise Real Estate Advice for an obligation free chat.
