Buying Your Dream Property: 6 Tips to Get the Best Deal
Buying a home is a dream come true for many Australians. Because it’s also likely to be the largest single purchase you’ll ever make in your lifetime, it’s a good idea to have a plan.
As first-time homebuyers, you can improve your chances of getting the best deal by following these six expert tips below.
Get Pre-Approval for Your Loan
The first step in the home-buying process — one that should be completed even before you start looking at properties — should be to get pre-approved for a loan.
This helps you know beforehand which homes you can afford to buy and which ones you can’t. You’ll save yourself a great deal of frustration and time by knowing what your limits are before you start actually touring homes and properties.
As a bonus, by confirming your eligibility, sellers and agents will find you more favourable as a buyer. This is because sellers and agents know that you can secure the financing necessary to move forward with the sale.
First-time homebuyers who haven’t gone through this step will need extra time to get approval. This could be an important factor for those sellers who are very motivated to sell their home.
Know the Deals in the Marketplace
Prepare to put some serious effort into research. Look around and find out which homes have sold in the area recently. Make a note of important information — including the listing price, the final sale price, the number of bedrooms, size of the property and more.
By being informed about the sold homes in the area and the trends in the market as a whole, you’ll have a better chance of success when it comes to negotiating with vendors and agents.
Research the Market
Check out recent sales of properties that are located within 1 kilometre of your dream property. Inspect similar properties in the area to see how they compare to one another as well as your dream property.
Pay special attention to the unique features these homes offer and that set them apart from one another. Note how the homes’ prices reflect the presence of those features so you can determine just which ones are important to you and which ones you can do without.
Determine Your Budget
Know how much you can afford before you start looking so you can keep your frustration level to a minimum as well as the time spent looking.
Keep in mind that the monthly mortgage is just the beginning of the cost of owning a home. Make sure that you add in the costs of regular upkeep, lawn care and landscaping, utilities, and renovations to your budget to determine if you’ll be able to afford it.
Consider the other upfront costs of purchasing the property such as deposit, stamp duty, lender fees, inspection fees and other related fees.
Take a Closer Look at the Property
Now that you’ve found your dream property, it’s time to take a closer look at it. Carefully inspect each of its features and consider any possible drawbacks that might exist because of them, such as an increase in maintenance costs or your liability.
Secure a professional inspector who is trained to be able to spot any potential problems. Depending on what is found, you can take this information to the vendor and negotiate, if they are fairly minor.
Items such as foundation issues or a major system that is unsafe could make you rethink your interest in the property.
Learn more about the property’s history. Why did the vendor want to sell it in the first place? A move for a job is a reason that doesn’t raise any questions. However, learning that the cost of utilities is high is something that you must consider.
How long has the property been on the market? What’s the asking price? How do these answers compare with those properties nearby that have sold recently?
Make an Offer Below the Asking Price
You’ve done your research, delved into the information about nearby properties, carefully inspected your dream property, and learned into its sales history. You’ve come to the conclusion that this is indeed your dream property.
Make sure to develop a game plan. Understand what is motivating the vendor so you can use that to your advantage. Be cautious while also being flexible. Start off by offering the vendor a purchase price that is between 5% to 10% below the asking price.
Doing so gives you room to negotiate while still conveying your serious intentions to purchase the property to the seller.
Conclusion: Achieve the Australian Dream of Owning a House
Buying your first home will be one of the biggest financial transactions you’ll ever be part of. Not surprisingly, it is a complex process that requires that you prepare for every eventuality the best you can.
Make sure that you always stay informed so you can get the best deal. Having an objective expert in the industry can make the difference between a satisfying experience and one that makes you wonder if you got everything you wanted. Speak to the experts at Shore Financial for strategic home loan advice.
Disclaimer: This is general information only and should not be taken as financial advice. Please speak to a Shore financial planning professional before making a decision on your home loan.