At Wise Real Estate Advice we understand it’s difficult finding and buying your first home. An ideal first home is different to everyone, with much to choose from. Take for instance, established property, renovation property, new house and land packages or apartments. Our first home buyers agents answer the hard questions at each stage of the property buying process managing every step for you.
Moving towards property ownership is equal parts exciting and confusing. The process in unlike almost any other and with so many different factors to consider there is always the question in the back of your mind as to whether you are making the right decision.
Across the Buyers Agent Market, the fees for hiring buyer’s agents vary depending on the level of service you choose, the scope of job you require and their expertise. Wise Real Estate Advice offers a fixed rate so there is no incentives for the buyers agent to spend more.
If your budget is $450K or $2M, our fees remains the same. Our fixed rate covers our clients until a property is purchased regardless of how many auctions or private negotiations it takes. The responsibility is on our buyers agents to provide a high quality service that is paid on performance. Our clients say ‘we make buying easy.’
They do the legwork on researching the best value loans on the market from the hundreds available, then support you though the application and settlement process.
Represent you though the legal process of settling a property and insuring contract clauses and deposits are satisfied.
Importantly, being a first homebuyer you may be able to apply for government grants like FHOG and stamp duty grants.
You will probably come across the saying ‘location, location, location’ many times during your search for the right property, and in 99% of cases the advice is correct. To determine which location you should buy in, ask yourself what it is you want to achieve out of owning a property.
If you plan to live in the property, create a list of must have, such as local cafes or living close to family and friends. If the property is intended as an investment, proximity to public transport and desirable school zones are generally well received.
Purchasing a property may seem like a sensible life step, but you need to make sure the decision is right for you and your individual circumstances.
It is easy to feel pressured by friends, family members and the media that owning a house is the great Australian dream, but is it your dream? If it is, is it your dream right now?
Knowing where you want to buy, and what you can afford to buy may be two very different things. Setting a realistic budget that accommodates changes to your current lifestyle is important.
Besides a possible increase financially from rent to a mortgage, making allowances for council rates, insurances and unexpected repairs is vital. Once you know how much you can realistically spend you will be better prepared to begin looking for a property in the right area for you.
The length of time you intend to hold the property is also very important. If you are looking for a property to renovate and sell for a profit you may be looking at a different area than where you would want to settle down and raise a family. Knowing your long-term goals will help clarify what you should purchase right now.
One of the bigger upfront costs you may have to pay is stamp duty or transfer duty on your property. Find out how much you will need to pay using the following stamp duty calculator. If you are a first-home buyer, check what stamp duty concessions you are entitled to in your state.
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.
Under the scheme, a one-off grant is payable to first homeowners that satisfy all the eligibility criteria.
If you are buying or building a new home valued up to $750K, you may be eligible for the Frist Home Owner Grant of up to $10,000. First home buyers can also claim a 30% reduction in stamp duty for purchases up to $600,000, a reduction set to increase by 10% in July 2014 and 10% again in July 2015.
A few rules that apply the FHOG:
Become a real estate expert, read up on news articles, sale prices, market conditions, attend auctions and submit offers. This knowledge can save you tens of thousands.
A popular trend is using a buyer’s agent to do all the hard work for you. A Buyer’s agents are licensed professionals who specialize in searching, locating, evaluating and negotiating the purchase of property on behalf of buyers. They do not sell real estate. They are engaged independently and paid for by the buyer to act on their behalf.
When determining your budget ask yourself the following questions:
– How much can I borrow and still live comfortably?
– Can I still live comfortably if interest rates went up by 3%
– Do I have a backup plan if my circumstances change?
Draw up a budget with your incoming and outgoing expenses with both of the above scenarios in mind.
A mortgage broker can offer you loans from all major banks with a range of products that are competitive, saving you money, versus visiting a banker who has access to only a few.
Ask questions regarding deposits, honeymoon periods, fixed vs variable, and also the option to fix a percentage and leave the rest floating.
For more info on mortgage brokers visit the smart money web site.
Choose one that is qualified in property matters. They are a wealth of important resources who will think of various things you may have otherwise overlooked like:
– Verifying all the property documents (section 32’s)
– Making sure special conditions on the contract are for-filled.
– Ensuring settlement is a smooth process.
Once you choose a bank you will need pre-approval on a loan before bidding at auction or entering into a private treaty sale. Pre-approval generally lasts three months and will confirm how much you have to spend.
Mistakes Home Buyers Make – and how to avoid them
Undoubtedly, emotions plays a huge part in the property markets’ expense growth.
Generally speaking, people who are purchasing a home for their families personal use are likely pay more for the property than an investor.
The simple reason is because their purchase is driven out of emotion. Becoming worried that they will miss out on the ‘perfect’ property, will cause some buyers to ignore rationality – and their budgets! This results in over capitalizing on a property because of fear driven decisions.
Alternatively, an emotional purchaser often buys a property in an inferior location out of fear that the properties in their preferred location are out of their reach. With the emotions and fear driven decisions in play, they are left with the notion that any property is a good property, so long as they are in the market. The market however, doesn’t work like this, and that second-choice property will always be a second-choice property.
There will always be those who decide to wait for the market to swing in their favour. The issue that arises with this approach, is that investment quality properties in the city are unlikely to be a part of those dips in the market. Instead, the probability is they will continue to rise in cost because the demand is continually increasing. This in turn, leaves those who have held out for a swing in the market, further behind than when they begun.
Putting down a prior offer or attending an auction can put a buyer in a disadvantage position, this could see you paying more for a property then what it’s actually worth. If a real estate agent agrees to a prior offer, it could indicate that you are the only potential buyer for that particular price. By doing this it could expose your budget and could potentially be used against you and other potential buyers, to ensure that the selling price will be a lot higher, regardless if it is a public auction or a private negotiation. If you choose to negotiate on a property yourself read ‘negotiating on property price’ article.
It’s vital to have a rock-hard understanding of the market value of the property, and keeping in mind that the price will not always equal the value of the property. You can feel quite disheartened when you discover that you have paid a lot more for a property then the going market value, purely because you did not undertake the right research, or you became emotionally attached to the property.
The correct research is the key to negotiating an appropriate price for both parties. If you do not have the time to undertake the correct research, consider a Buyers Advocate to help undertake the whole process for you.
If you decide to put down a prior offer, it is crucial to offer it at the right time. If you decide to give an offer days before the auction, it is less likely that the agent will accept the offer, unless they have not received any interest from other potential buyers. If you decide to put down an offer, put it down as soon as possible, as this will save both parties the stress of an auction process.
Even though a normal person purchases a couple of home in their lifetime, you need to remember that you up against professional negotiators, who sell and buy houses for their clients every week (real estate agents).
It is highly recommended that you engage with a Buyers Advocate, to ensure that you can buy the right home at the right price.
For an obligation-free conversation, contact Wise Real Estate Advice on 1300 009 473 to discuss how their buyer advocates can turn your property goals into a reality
