So, you’ve decided to dip your toes into the property market in 2020.
Buying a home is such an exciting time and a major achievement – but the process does require a big commitment, both in time and money.
To help get you on your way to securing your very own piece of the property pie, we have identified some important home-buying steps.
Hopefully, you’ll be chilling the champers and celebrating your new keys and homeowner status in no time!
Step 1. Know your budget
Ideally, before you hit the real estate websites in earnest, you’ll have saved up a tidy deposit and know how much you can borrow from a lender.
Getting a pre-approved loan – either directly from a lender such as a bank or via the assistance of a mortgage broker – will enable you to narrow your search focus to homes you can actually afford.
If you haven’t yet reached your savings goal for a deposit, you’ll need to tweak your lifestyle. Have a look at your costs and see what you can realistically cull.
Before you take on any home debt, pay off others you have lingering. Credit cards, personal loans, payment plans – get rid of them and start afresh.
Before giving you a loan, your lender will want to know your history of saving and spending – make sure you have a strong savings history.
You’ll also want to ensure your future repayments won’t create a cash-flow nightmare that seriously impinges on your lifestyle. You still need to live!
Before you lock yourself into a mortgage, realistically assess your income and all outgoings, including all bills and your future house repayments.
Importantly, always have an emergency fund. It will give you financial breathing space if you lose your job or need to pay an unexpected bill.
Step 2. Identify what you want
Are you buying your first home, forever home or an investment property?
Do you want a house, townhouse, apartment or villa unit?
Do you plan to build new? Do you plan to renovate? What suburbs are you keen on?
Answering these questions will help you considerably narrow down the field.
While you might have a very definite type of place in mind, it might be worth keeping your options open, even if just a little, so you have a wider pool of possible picks that will suit your budget.
Step 3. Consider your future needs
Living in the moment might be all the rage, but when it comes to real estate, it’s not necessarily ideal.
Before you buy your new place, project what your needs might be in, say, one, three and five years’ time. Sure, it can be a tricky exercise but it might help you avoid a home that’s only suitable short term.
Important things to consider include: how many bedrooms and living areas will you need; will a study space be important; can you handle stairs; will you need on-street parking; do you want a garage; how important is outdoor space?
The answers will help you narrow down the field of likely contenders even further.
Step 4. Do your homework
You might have come across real estate experts advising you to “do your due diligence”. This simply means do your homework!
In other words, familiarise yourself with all aspects of the home-buying process. Don’t shy away from any terms or parts of the process you don’t understand. Face each one square on and find out what it means – not only will it be empowering, it will significantly lessen the likelihood of you making a purchase you’ll regret.
It’s important you become an expert in the suburbs you’ve targeted. Have a sticky beak at as many homes as possible, attend auctions and look online each week at sold prices.
Don’t fear asking the ‘dumb’ questions. Remember: property is not something you can easily exchange with a receipt.
Step 5. Get expert help
You can certainly buy a home without getting much help from a real estate agent.
But a good agent can be your secret weapon.
Seek out a personable, knowledgeable agent in your targeted area and let them know your requirements.
They will contact you first when a suitable contender hits the market. They might even contact you before the home is officially on the market, giving you a significant edge on the competition.
Other experts who can provide vital advice before you buy include a building inspector to check the home for defects before you buy it, and a conveyancer to assess the section 32 (the legal document with all the property’s information).
Don’t go solo in your home-buying journey.