4 tips for upgraders as the property market lifts
With interest rates having fallen to record lows in 2020, some households have increased free cashflow and a…
Discover how to buy a property and get finance, wherever in your journey you are.
Buying your first home can be a daunting prospect. It’s often difficult to know where to start and what you should be aware of. Read on to learn more about the process of buying your first home, and explore some helpful advice that will help you along the way.
What is required to buy a property?
Before you can start looking for properties, you will first need to take stock of your financial situation and assess your ability to buy a property. This is important so you don’t end up wasting your time looking at properties you can’t afford.
Take stock of how much you earn and how much you currently have in savings each month.
If you have extra money, put it into an account that earns a high-interest rate and make sure you can still contribute at least the minimum amount to a pension or savings account each month.
It is also a good idea to speak to a buyer’s agent to help make sure you are on track to buy your first home without any unexpected bumps along the way. They can connect you with a licensed mortgage broker who can assist with your borrowing capacity.
Know what you’re looking for
When you are ready to start looking for a property, it’s important to be clear about your criteria.
Decide what type of home you would like to buy, and what your budget is. This will help you narrow down your search in the right way.
Put yourself in the shoes of another homebuyer, and think about what features would be most important to you.
Would it be the location, size, style, or floor plan that you like the best?
These are important factors to keep in mind when looking at different properties. Once you have a clear idea of what you are looking for, you can use this to help you decide which properties you should view, and to make a potential shortlist of candidate properties.
Figuring out your budget
Once you have decided on a type of home, you can begin to think about the budget you have available. Remember that you may choose to make a small investment in a property, so you don’t want to buy it if you don’t have enough money to cover the costs involved.
What costs are involved in buying a property?
Finding a mortgage broker or lender
Next, you may need to find a broker or lender who can help you get a mortgage. A mortgage broker is someone who acts as a facilitator between you and a lender. They can help you find the right lender and may also be able to help you with settlement planning.
A settlement plan is a document you will need to sign when you finally close on the property. It details how much you will pay at settlement, who you will pay, and when you will pay them.
Generally, mortgage brokers receive commissions from the lender, rather than charging you directly.
Negotiating with the seller and finding a final deal
Once you have identified a property you would like to view and found a broker or lender to help you, it’s time to start negotiating with the vendor, usually through the selling agent.
A seller may be willing to accept less than the asking price, or they may be willing to negotiate the terms of the sale. Before you arrive at the meeting, do some market research to find out what other people are paying for the same property. There is no substitute for market research.
A buyer’s agent will have access to a full sales database and can ensure that you never overpay for a property.
Wrapping up
Buying your first home can be a difficult process, but with the right approach, it can also be an exciting and rewarding experience. This article has provided you with some useful tips on how to buy a property, and get finance, wherever in the world you are.
Remember to think about what type of home you would like, who you would like to live in the home, and what financial situation you are in.
Negotiation is challenging if you haven’t been through the process before, but it’s important to try to negotiate the best possible price and terms for the property, since buying a home is often one of the biggest purchases Australians ever make.