Are you thinking of buying a property? Perhaps you haven’t been through the process in a while.
I am regularly asked what the initial steps are to buying a property. I have found that the process is normally 3-6 months, however for some people it can take over a year.
I have some tips for speeding up the buying process, the following suggestions can help you create a plan and feel confident about what to do when you find a property you wish to own.
The Buying Steps:
- Speak to a mortgage broker or bank. They can assess your financial position; savings, income, current assets and liabilities. They will give you an idea of how much; you can borrow, deposit you need, stamp duty to pay and the ongoing monthly mortgage repayments. Always reserve an extra few thousand dollars for buying costs including; building inspections, legal fees, searches, transfer duties etc.
- Research the market to build your confidence. With the knowledge of your borrowing capacity research suburbs you’d like to live in and the surrounding areas. Sign up to real estate websites, property alerts and social media sites that send you new listings in the areas and price range you’re looking in.
- Attend open homes, auctions, REIQ seminars. Talk to real estate agents, most of us are very happy to give you feedback on the market, the locations, the style of properties selling well and lots more.
- Stick to what you’re good at. Have a think about what sort of property is going to suit you best. Are you handy? Do you need low maintenance? Do you like gardening? Cosmetic upgrades are more manageable and cost efficient than structural alterations. Some people get excited by the renovation shows on TV, where updating a whole house looks easier and cheaper than in reality.
- Obtain pre-approval through a broker or bank. Once you have a comfortable level of market understanding apply for pre approval. The pre-approval lasts 90 days before you have to resubmit, the approval allows you to confidently make offers/bid at auction knowing your financial position.
- Numbers do not lie, do your sums. Calculate the mortgage repayments, cost out your bills, food, and play money on a monthly/annual basis. If you can’t afford to buy your dream house right now, please don’t over extend. Financial and mortgage stress puts pressure on you, it’s distracting and it is not worth the worry. Choose a neighbouring suburb a little further away from lifestyle hubs with café precincts and shops that you enjoy. Very often it’s the neighbouring suburbs which have the most capital growth to come.
- Do you need to sell first? Obtain a market appraisal from a local agent (Please call me!). Find an agent you have confidence in their ability to communicate with you and to your buyers, an agent that cares about how your home is presented to the market and an agent you have a good relationship with– after all, you have to work with them for a few months!
- If you like a property, make an offer. Please note that an offer is not just the price; an offer is made up of a number of components; deposit, time frame for searches, inspections and settlement etc. Submit your offers in writing- a verbal offer is not worth the paper it’s not written on.
- Avoid making offers too low to try to ‘steal’ the property. If you are sincerely interested in the property then you want the seller to engage with you, give them a price to say ‘maybe’ or ‘yes’. When you submit a low offer they may be offended, disregard you as a tyre-kicker and they are on the back foot from the beginning which makes for a sticky negotiation.
- Enjoy the process, it’s an exciting time. I love the saying, “don’t wait to buy real estate, buy real estate and wait!”
Ultimately, just get started, speak to a mortgage broker. There are many sales scenarios and each circumstance is different and that is what makes real estate so interesting. I am happy to help you through the process, please feel free to call me for a friendly conversation.
Author: Laura Langford