7 Things You Should Ask Yourself When Buying Your First Home
You’ve been working hard, saving for years. The market is good, interest rates are low and you’re pretty sure you have enough in your bank for the deposit on your first house. Now begins the fun part - the search for the perfect property that you will call home.
Buying a house is exciting, however it requires careful planning and there are things you should consider before you sign to avoid remorse in the future. We look at 7 questions you should ask yourself before buying your first home.
1) Where do I start?
Before you even think about buying a home, talk to a trusted family member or friend who has gone through the process. They can offer advice and provide support when you need. You should also understand how the buying process works - what to expect and what you should do to make sure you are ready.
2) Can I afford it?
If you enjoy going on brunch dates on the weekend, Tim Gurner has some bad news for you. The 35-year-old Australian real estate mogul famously told Ross Greenwood on 60 Minutes last year that he “wasn’t buying smashed avocado’s for $19 and four coffees at $4” when he was trying to buy his first home.
There’s no doubt about it - buying a house is one of the most expensive things you will ever purchase. Therefore, having a realistic look at your finances and setting a budget on how much you can afford on your monthly mortgage repayments is imperative. You don’t want to get caught out on fees from your bank, which can affect your credit rating and impact other loan applications in the future.
Also be aware with other fees associated with purchasing your new home. Upfront costs from buying and moving furniture, stamp duty, building inspection fees, conveyancing and legal fees can add up quickly, so the highs you would be feeling from making such a purchase may be replaced with stress if you are not prepared.
3) Have you done your research?
You want to get the ball rolling immediately. But before you sign, ensure you seek advice from a lawyer or conveyancer to ensure that you are aware of any issues with the property, and in your contract of sale. You don’t want to get caught out on things such as easements and covenants after you’ve signed.
Also, look at different banks and lending institutions before you commit to a home loan. Compare all the costs that are involved before you commit to the right one for you.
Look around at the value of other similar properties in the area to make sure that your offer is at the right price. You should use a trusted realtor who will have your best interests when you are looking to buy, who can help you negotiate on a fair sum.
4) Is this where I really want to live?
You’re torn between two houses - a brand new, 3 bedroom townhouse in Morningside with a tiny outdoor area to hang your laundry. The price is a little higher than what you’d been ideally looking for, but it’s a short 5 minute drive to work, the gym is just down the road, and the suburb is safe.
And then there’s the larger, older house in Coopers Plains, which offers 4 large bedrooms and a pool but the carpets need replacing and a fresh coat of paint but it’s going for a great price. There were also a few interested looking people at the open house you went to on the weekend so you need to act fast.
List the details that are important to you - is it the convenience of shops, public transport and getting to work? Or are you looking for a property with a large backyard so you can have a dog and raise a family. These little questions can determine which property is the better option for you.
5) Can I see myself living here for a while?
You should ask yourself whether this house will be your home for more than a couple of years. Consider how it will fit into your lifestyle, and whether you can imagine yourself living there should things change, such as if you decide to start a family.
Also, see the home as an investment - living in the right area of town can be financially rewarding. Your land value could dramatically increase over a period of time, meaning that you could get a lot more return than you expected when you do decide to sell.
6) What can I do/do I need to do to the house?
It can often be appealing to buy a house which requires ‘fixing’ just because it’s selling at a bargain price. Be aware that this may cost you a lot more than you anticipated, and you do not want to get trapped after you’ve signed the contract.
Make sure you take the time to arrange proper inspections before you buy, where structural faults, and plumbing and electrical issues can cost you tens of thousands of dollars. Ensure you have added up the total amount of money it will take to ‘fix’ the problems before you make an offer.
If you are looking to extend or renovate the house, make sure that the project will comply with any codes that your local council has enforced in order for it to be approved. For example, extensions and renovations to pre-1946 homes in the traditional building character overlay in Brisbane have limited design considerations and are required to comply with specific codes.
7) Is this the one?
You’ve found it - the house of your dreams you stumbled across on the fourth page of the real estate website you’ve been browsing on whilst sitting on the train going home from work.
You want to make an offer right now.
Take a step back - there’s no rush to buy your house so always make sure you take your time when looking for your house. Make sure you shop around on different websites before you decide on “the one” - you want to be absolutely sure.