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Before you start the search for your first home, you’ll need to sort out your finances. Besides the money you need to fund the transaction, there are additional costs and fees that you should also budget for.
If you’re serious about buying your first home, you’ll have already started saving and have a rough idea of what your budget is and how much you’re hoping to borrow for your home loan. To help you with this step, you can use the following online calculators to help work out the costs for buying a property based on your income.
Once you’ve got your savings under control and you’ve spoken to a St.George Home Loan expert, it’s time to start searching for your new home.
Firstly, you’ll need to think about which type of property will suit your needs. Remember to plan ahead – what suits you now might not work for you in 2, 5 or 10 years’ time. After all, the aim of buying your first home is to find somewhere you want to live in for a while.
If you don’t have kids but want to start a family, buying a one-bedroom apartment might not be the best option. If you already have kids, space is going to be important, especially as your children get older. You might even consider becoming a ‘rentvestor’. Owners may choose to continue living in their rental home while purchasing their first home as an investment. The plan is to move in down the track when your needs change, like when you have kids or when the kids are older.
For first home buyers in many of the capital cities, buying a large house isn’t always an achievable goal, but there are still a range of options. Smaller and more affordable properties such as townhouses and apartments can offer a lot for first home buyers and new families. Once you’ve got a clear picture of what will suit your needs, it’s time to think about location.
Buying off the plan involves purchasing a property that has yet to be built, based on the strength of plans and projected construction timeframes. Off the plan can sometimes be a good option for first home buyers. There are pros and cons, but ultimately you need to think about whether the property and construction time will meet your needs in the long term. It’s appealing to have a home with new fixtures that no one has lived in before you. Buying off the plan could also give you more time to save up if the building is a few years off completion.
Of course, buying off the plan has risks. You can’t see the finished product when you buy and it might not be what you were expecting once it’s finished. Delays in construction or issues with contractors could cause problems, so it’s important to check any contract thoroughly before you sign it. As a savvy home buyer, do your research first and work with experienced developers who have a proven track record so you can lessen the risk of delays.
You might have ideas about which area you’d like to buy in, but you need to be willing to compromise if your budget isn’t big enough for your dream location. It’s also important to be realistic about the lifestyle you expect you’ll be living. A beachside property might sound nice, but it can be expensive and sought after, so you might have to settle for a location further inland.
Proximity to essential amenities, such as supermarkets, schools, hospitals, parks and public transport is also important. Check what the local roads are like, the distance to and from work and whether you will mostly drive or catch public transport.
Also look at the local infrastructure and do some research into the area. While there might not be a train line when you purchase, there could be plans to build one in the near future. You should check whether there are big developments in progress or due to start work soon. It might be a quiet area now, but you could find yourself living near a tower of apartments down the track.
For help finding the right suburb and property, get free reports with the St.George Property Market Research Tool.
It’s easy to let your dreams overshadow reality when buying your first home. Think realistically about a home or location and don’t be too picky. While your dream location might be out of reach, trying one or two suburbs away could mean the difference between sticking to your budget and overspending.
When you inspect a property, you need to think practically. A five-bedroom house might give you enough space to set up a home theatre and gym, but it’s not worth the financial stress if it’s more than you need. Be sensible and don’t fall for a home out of your price range.
Auctions may also spur you to overspend, as it’s easy to get swept up in the competition and excitement. If you’re concerned your emotions are clouding your judgement, call on a friend or family member to help you with the property search and stay your hand if the bidding goes beyond your budget at auction. Otherwise, you could hire a buyer’s agent to help you find a property that sticks to your budget.
You’ll also need extra money for the additional fees and costs, so be strict with your budget. Prepare yourself for the unexpected. Consider emergency renovations or repairs, interest rate rises and changes in financial circumstances, such as parental leave or career changes.
Once you’ve found a place that meets your requirements and falls within your budget, remember that inspecting a property involves more than imagining where you’ll put your furniture.
This is your opportunity check if there are any problems. When you’re inspecting the property, remember to check:
Doing your own check before getting a pre-purchase building inspection will help you determine what you’re getting yourself in for. You should also try to inspect the property at different times of day to see what the light and noise is like. Also keep in mind where the windows are positioned and which way the property is facing. North-facing properties will get natural light all year round, but a south-facing property could be gloomy, especially in winter.
Once you’ve gone through all the basic checks and considerations, it’s time to get help from the experts.
When you’re seriously considering purchasing a property, you’ll need to get some inspections done by professionals. It’s standard to get a building and pest inspection, however you might want other specialised inspections. Inspections can add up but they could save you money down the track if things go wrong.
Before you hire a building inspector, get quotes from a couple of different businesses and do your research to make sure they’re qualified and licensed.
Building inspectors will check the building as a whole, both inside and out, from floor to ceiling (including under the house and in the roof space). They should review the general condition of the building structure and its foundations and also check the fittings and fixtures, windows and doors, walls, gutters and drain pipes.
You’ll then receive a building inspection report with details of the areas that were included in the inspection. Any problems found during the inspection could be useful when negotiating the property’s price, especially if you’ll need to pay for the repairs.
A pest inspection is another necessity. A pest inspector will check the whole property, inside and out, for signs of pests, such as termites or wood borers. An inspector will look for evidence of actual living pests as well as signs of nests or property damage. If they find serious problems, the repair work could help you decide whether to buy or help you negotiate if you decide the property is right for you.
Plumbing inspections aren’t required before purchasing a home, but there may be plumbing issues that you or the building inspector picked up. This could include issues with the water pressure, hot water tank condition, traces of water damage inside or blocked drains outside. Getting a plumbing inspection can help for peace of mind to potentially avoid any nasty surprises once you move in.
As with plumbing inspections, an electrical inspection may help you discover if there are any existing issues with the property’s electrics. If you notice anything unusual about appliances or lights during your first visit, an electrical inspection will help determine if there are actual problems. It’s also worthwhile to get an inspection if the property is old, as this may help you anticipate problems that could eventuate later.
If you’re looking at a property with a pool, get a pool inspector in to check the condition of the pool, as well as the gate and fence. There are pool safety regulations throughout Australia, so it’s important to know that everything is up to code.
You might have found the ideal home with big, leafy trees, but these beautiful fixtures could cause headaches once you move in. An arborist could help you determine if the property’s trees are healthy and whether they have the potential to cause problems. While that big tree hanging over the house looks nice, it could be dangerous during a storm or block out natural light at certain times of the day.
A property may have plenty of potential, but you need to consider whether the work required to realise that value is worth your while. If you have little-to-no renovation experience, it’s probably better to find a home with little or no need for renovation. If you’re up for the challenge, a home requiring a lot of work can offer some great savings, but be careful what you wish for. Buying a half-renovated home could be a serious nightmare, especially if the renovations haven’t gone through proper approvals. Check the plans and if there have been any applications to the council for renovations and extensions. You need to be realistic when it comes to renovating. If you’re a busy family and work full time, spending your weekends renovating might not be ideal.
Whether you’ve found a place you really like or are simply ready to start looking seriously, it’s a good time to book a meeting with one of our St.George Home Loan experts. They’ll step you through everything that you need to know, from reviewing your finances to preparing documents for a loan application through to loan settlement.
While the whole experience of finding, inspecting, buying and moving into a new home can be confusing, as long as you’re organised and remain focused on the next few steps, you’ll find the process less painful.