Are you looking to buy a house? Perhaps you are looking to buy a unit or townhouse? Whatever property you are buying, if this is your first time doing so; make sure you are equipped with the knowledge and skillset to make the right decisions. After all, buying a house or any other property isn’t something you can undo so easily.
Buying a property involves much more than an everyday transaction. Not only does it entail significant financial decisions, but also important legal aspects.
Following is a fundamental guide from the REIQ to assist you with buying a property.
Determine Borrowing Power
Buyers should strive to accumulate the highest possible deposit before deciding to buy property to minimise the amount they need to borrow. This will also minimise the amount of interest that will eventually be paid. Most lenders will generally require an owner occupier borrower to provide a deposit, but some lenders may be prepared to lend on a smaller deposit depending on the borrower’s financial commitments and the amount of security they can offer (for example, equity in an existing property).
Mortgage insurance
Some lenders may require the borrower to carry mortgage insurance, depending on the amount the borrower requests. Mortgage insurance protects a lender against any loss should a borrower default on their loan and the buyer typically bears the cost of mortgage insurance for the lender.
Interest rates
Property buyers should take into account the potential for interest rates to rise once their loan is established and ensure that they allow a buffer to enable them to make higher repayments should this occur.
Costs of buying
Those looking at buying a house can expect to incur fees and charges over and above the purchase price of the house; these costs will vary dependant on the purchase price and the financier. Typical additional costs may include loan establishment fees and other bank charges, legal fees, stamp duty, transfer duties and insurance premiums.
Talk to a professional
It is advisable that buyers talk to their financier or mortgage broker before they start the task of property hunting so they know what boundaries or limitations they may have.
Mitchell’s Realty Hervey Bay strongly recommends the use of a qualified conveyancer before undertaking the purchase of any property.
Research the market
When looking at houses to buy or any other property for that matter, make sure you do your research! The fact that you have read this far is a good start…
From the myriad of factors that determine a property’s price potential, location (specifically proximity to community services, and availability of facilities and infrastructure) seems to hold firm as the perennial key to future capital growth.
Schools, shopping centres, public transport, parks and, increasingly, cafes and restaurants, are all desirable aspects of suburban living and favourable attributes to potential property buyers.
From the majority of buyers’ viewpoints, the most important features for the location of their home are:
- The safety of the neighbourhood, and whether it is close to
- Schools
- Medical services
- Shops
- Their workplace or reliable public transport.
- Proximity from the beach & esplanade
Familiarity is also an important factor!
Did You Know?
Those looking to buy a house or any other property should also investigate property agents’ web sites, listing magazines, newspapers and other popular property websites.
REIQ Research shows that most people buy another property within only a few kilometres of where they currently live.
Also, if children have been attending a particular school for years, then the parents’ choice of buying a house is often influenced by how close a suburb is to the school.
The aesthetic characteristics of a suburb or street also rank high on most homebuyers’ list of desirable features.
Buyers may want to research property sales history and get information about median prices in specific areas. The REIQ publishes median sale prices for houses, units/townhouses and land by suburb, as well as in-depth commentary, in its Queensland Market Monitor quarterly publication.
An agent will often provide a buyer with a brochure or some form of marketing material when they show a buyer through a property. This is a great way for a buyer to remember a property and also for them to be able to take any notes while inspecting the property.
Taking notes will make it easier for a buyer to compare properties through details such as the date the property was inspected, the address, the listed price or price range, and any key features of the property that caught interest.
Property Inspections
An agent will often provide a buyer with a brochure or some form of marketing material when they show a buyer through a property. This is a great way for a buyer to remember a property and also for them to be able to take any notes while inspecting the property.
Mitchell’s Realty Hervey Bay actually provides each buyer with a specific “Property Booklet” on each property covering everything a buyer should need to know about that property to make a good decision.
Taking notes will make it easier for a buyer to compare properties through details such as the date the property was inspected, the address, the listed price or price range, and any key features of the property that caught interest.
Don’t forget to ask:
It is important for a buyer to ask the agent about the terms of sale for each particular property and if the seller has any special conditions that may form part of the offer for example, the seller may want to rent the property back from an investor or ask for an extended settlement time due to their new property not being available.
If the property has a pool, check the legality of its fencing via the Pool Safety Council. Pools in a Community Titles Scheme (body corporate) are the responsibility of the body corporate.
Most agents will ask a potential buyer if they would like to be contacted at a later date if similar properties become available. If a buyer does not wish to be contacted for anything other than the attendance at the open house, they can clearly outline this to the agent at the time of the inspection.
Clarify inclusions – make sure you know what comes with the property!
A buyer should always ask the agent to clarify any inclusions or exclusions that may be part of the contract of sale. Unfortunately, a buyer sometimes moves into their new property only to find features that originally ‘sold’ them the property are now gone.
In general terms, fixtures are defined as anything on the property that is ‘screwed in’, ‘glued in’, ‘nailed in’, ‘bolted in’, or ‘plumbed in’ to the structures of the property.
Are the fixtures included? Typical fixtures include:
- Stoves
- Hot water systems
- Fixed carpets
- Clothes lines
- Television antennae
- In-ground plants and trees
- Ceiling fans
- Mail boxes
- Built in air-conditioning or heating systems
Freestanding movable items are called chattels and they can be included, however they must be noted in the contract of sale. Pool and spa equipment, potted plants and washing machines are good examples of chattels and should be disclosed separately on the contract of sale.
Items such as gas bottles, sprinkler systems, dishwashers and light fittings often cause debate and are grouped in a grey zone that should always be clarified before entering into negotiations.
Once a buyer has found the property they want to purchase, the price they would like to offer needs to be carefully considered.