There are a few things you’ll need to think about before the dream becomes your dream home.
To help make it easier for you, we've broken the whole process down into eight steps:
1. Start saving.
Okay, you’ve decided you want your own place. Now what? Well assuming you’ll be borrowing the money to buy a home, you’re going to need a deposit. Most lenders require you to contribute 20% of the purchase price from your own pocket. On top of that, you’ll need to pay bank fees, stamp duty (if you’re not a first home buyer) and legal fees, so you’re going to need to start saving. If that’s not your strong point, there are a number of online resources that will help you budget and reach your savings goal.
2. Find your loan.
The amount of money a lender will let you borrow will depend mainly on your income and your day to day expenses. Do a little research to find the best interest rates (both fixed and variable), then approach those lenders to see how much you can borrow (or you can have a mortgage broker do that for you). Interest rates are low now but will rise over the course of your loan, so make sure you don’t overstretch yourself. Once a lender has given you loan pre-approval, the fun begins.
3. Determine what you're looking for.
What does home mean to you? Is it a low maintenance lifestyle or a big backyard for your dog or a garden? Do you need to be near work or are you more concerned about lifestyle? Once you’ve decided on an area or the suburbs you like, do a bit of online research to see how much properties there are selling for. You might need to readjust your thinking if the suburbs you like are beyond your budget.
4. Find your home.
Most of your property searches will probably be online from your couch or dining table. Once you’ve narrowed your search down a little, you’ll want to actually inspect the home or homes that you like. You can either attend an open inspection at a set time or schedule your own time with the real estate agent. The real estate agent is a great resource in this situation so make sure you ask any questions you may have about the property.
5. Buy it!
So you’ve fallen in love with a home? It’s easy to get carried away with the emotion of it all, so make sure you’re leading with your head and not your heart. The two main ways you can purchase a home are by private sale or at auction. A private sale lets you make an offer that is lower than the asking price, whereas with an auction, the price is determined by the bidders who want the home. Be aware that if you’re buying a home at auction you’ll need to pay a 10% deposit on the day if you’re successful.
5. Have the home checked.
Just as you have a car inspected before purchase, it’s recommended that you organise a building inspection of a home before the auction (where there’s no cooling off period) or before the cooling off period ends on an offer you’ve made . A building inspector will check the structural integrity of all buildings on the property as well as things like electrical and plumbing, to ensure you won’t have expensive problems down the track. A pest inspection is mainly to check you’re not getting unwanted tenants like termites with your home.
Congratulations, your offer has been accepted or you’ve bought a home at auction. It won’t be yours legally though until settlement is completed. This is when your property is paid for in full and the title is transferred to you. Your solicitor or conveyancer will finalise the settlement with the lender and seller. After settlement, you’ll receive the keys to your new home and will have to pay the stamp duty on your new home (usually within 30 days).
8. Move in and enjoy.
There’s nothing like the excitement of moving into your first home and making changes that make it yours.