Buying a home is one of the biggest decisions and most likely the largest purchase you will make. The Australian Property Market has recently started to recover from a slump and a decrease in interest rates from the Reserve Bank is good news for people looking to take out a mortgage.
Consider all the costs
There is more to pay than just the mortgage when buying a house. Some of the fees you might be up for include but are not limited to (approx. amounts1):
- Loan application fee – $500
- Conveyance and disbursement fees – $1,500
- Building and pest inspection fees – $500
- Stamp duty – dependant on house price and location, differing for each state
- Legal fees
- Deposit for utilities
- Renovations and repairs
- Redirecting mail
Location, location, location
When thinking about a suitable location, some questions to consider are: Is the area really affordable for you? Does it suit your lifestyle? Is the area safe? If you have found and are considering a property in an area you aren’t familiar with, take some time to walk around and get to know the area. Check out the neighbours, parks, pubs and local amenities. If you will need to take public transport, take a practice run from the area to your office to see if it is a feasible distance to travel every day. Also if you have children, investigate the local schools.
What are your must-haves?
What are the most important elements of a property to you? Have you always wanted a townhouse? Do you need garage space for all of your five cars? Are you happy to renovate or would you rather a home that’s ready to be lived in? Is it critical to have a second bathroom? Write a list of all of your must-haves and take it to inspections with you. This may be a transient list that is modified as you discover what’s on the market and within your price range.
When going on a property inspection, take the opportunity to ask the agent as many questions as possible so that you have the full story of the building. Why is the owner selling? Did the vendor set the price and are they open to negotiating? How long has the house been on the market? Have many other parties viewed the property? If you are viewing a large number of properties, take notes as you go so as to not to forget any critical information.
Look for structural issues
When inspecting a property, there are many crucial structural issues that you should look out for. The below list highlights just some of the aspects of a home worth investigating:
- Open windows and doors – to make sure they work and close properly. Also check that drawers and cupboards are easily opened and closed.
- Turn lights on – and off again to check that they function properly.
- Flush the loo – and turn the taps on to see if the plumbing is working efficiently. Have a peek in cupboards under sinks to check if they are dry (and pipes are not leaking).
- Look under the rug – pick up rugs and mats to look at the carpet and floor underneath to check for any stains.
- Check your reception – look at your phone, make a call, send a message and if you have a smart phone, access the internet. Is there good reception?
- Look for damp spots – check the walls, ceilings, cupboards, floors and sheds for any wet spots or mould and use your nose as well – does it smell damp?
Visit the property at different times of the day
Make a few visits to your potential new home at different times of the day. By visiting at night, you’ll see what the area will be like when neighbours are at home. Is it a quiet area? Or is it on a busy and noisy street? Only inspecting during the day won’t give you a full picture of what it would be like to live in the property. Take photos of each room when inspecting so that you capture all the details, this can be particularly handy when inspecting a lot of houses and flats.