“Hello and welcome back to daily buying tips, I’m Dean Berman from Berman Buys.
Today were going to talk about what to do when buying a house for the first time.
Your a first home buyer and no doubt want to get your first purchase right.
However you are finding it hard to work out exactly what the process actually looks like.
To start you need to know how much you can borrow.
To do this, speak to your bank or mortgage broker and they will be able to collect a bunch of information from you to better understand your capacity.
Once you have your borrowing capacity and are ready to purchase, get your pre-approval which generally lasts for 3 months.
I would usually research which areas would will be right for your requirements. You may already have a specific area you want to focus on, which is great.
Start searching for properties that match your budget and areas of choice.
If you did your research correctly you will start finding a few potential options within a few weeks.
If your finding it impossible to find anything which is remotely suitable, your budget maybe too low for the area and may have to re-visit your research.
Once you have a property or properties, you should inspect them to make sure you like them. I would look out for structural issues, signs of pest or water damage and anything else which is not quit right.
It can even be worthwhile asking the agent representing the seller if there are any issues.
If you like one of the properties and want to put forward an offer, I would also request the contract at this stage for your solicitor or conveyancer to review.
You now enter the negotiation.
This is a time where money can be saved or spent very quickly.
It’s important you don’t give too much away if possible. As the saying goes, keep your cards close to you.
You will want to set a maximum price you will go to. Generally starting from a lower point that is reasonable and is in line with the current market.
Terms will also affect the purchase of the property. Strong terms such as a cash offer with limited cooling off period and settlement period or the period the sellers most want would be attractive to the sellers. Usually first home buyers won’t have this cash option.
The deposit is another negotiation hot point either 5% or 10%. Try go for the lower the better.
If the offer and terms are accepted it would be wise to get a pest and building inspection for a house and or strata report on a strata development.
If that all comes back positive, then proceed to go through the conveyance with your legal representative. If there are some points of concern, then re-negotiate the terms and or price if there could be significant cost to rectify the issues.
You will most likely now pay 0.25% deposit and sign the contract to exchange and go into a 5 day cooling off period, after which the balance of the deposit agreed would be paid.
Sometimes the sellers would want a 66W which is an unconditional exchange, in which case you would pay the full deposit amount straight away that was agreed during the negotiation.
It’s important to keep your bank and or mortgage broker up to date during the whole process so they are in a position to get your approval formalised as soon as possible.
Once this has occurred you will have gone unconditional.
Now you will wait for the settlement period to occur, usually around 42 days. Once this has happened your mortgage will come through and you will formally take ownership of the property.
Congratulations! You just bought your first home.”