They call it the Great Australian Dream, and for good reason – everyone thinks about owning their own home at some point. It’s one of the ultimate signs of independence and a concrete opportunity to build your own wealth.
With property prices rising across in-demand cities like Sydney and Melbourne, however, saving up enough money to buy a property is becoming difficult, to the point where it seems impossible. Many also have to contend with competition from investors as well.
Buying your first home is a big but rewarding step towards securing your financial future. Here are a few things to consider as you prepare to take the leap!
1. Can you get the money?
Obviously, the first and most important consideration is your financial stability – without access to funding, there’s no point in house hunting! When you’re applying for a loan, banks scrutinise your income, assets and existing debts and liabilities to determine whether you’ll be capable of paying the loan off. The higher and more stable your salary, the more likely you are to get the money. If getting a loan on your own seems like mission impossible, there may be ways to partner up with a friend or family member to get your foot on the property ladder.
2. Do you know how to buy?
It may sound straightforward, but there’s actually a lot of information to process. Knowledge is the key to smart property buying, so if you’re new to the world of property, it’s wise to get expert advice, especially for the legal side of things. Get in touch with agents, and ask around for a good conveyancer to help you handle the complexities in a contract of sale. It’s important to note that different states have different provisions when it comes to both private sale transactions and auctions, so you need to do proper research on what the policies are in your neck of the woods.
3. Do you know what you’re buying?
Buying property is a complex but exciting experience, so it’s important that buyers don’t get too caught up in the ‘thrill of the chase’ when making a potential purchase. Many a “perfect” home has yielded nasty, costly problems, such as hidden mould, structural faults, and issues with plumbing and electrical wiring. Keep your eyes peeled when conducting an inspection, and if you’re not sure what to look for, consider hiring a building inspector to go through the property for you. This way, you know what you’re getting yourself into before you put an offer on the table.
4. Consider your access
The costs involved in property buying don’t stop with the property deposit – stamp duty also rears its ugly head as you get deeper into the buying process. This tax may be waived if your state currently offers a stamp duty concession, and keep in mind that the rate increases with the price of the property. Other costs such as Lenders, Mortgage Insurance, legal fees and bank fees may also be payable.
5. Are you ready?
In the end, it’s all about your readiness to enter the market. Technology is making the logistics of buying property easier, but it’s still a long road of property searching, paperwork compiling and doing your numbers. If you are ready to invest your time, money and energy, then you may be ready to dive in! Just try to get as many ducks in a row as possible first (such as paying off credit debts, and building a strong employment record), so the process becomes as seamless as possible.