Top Tips From Our Experts On Buying Your First Home
Our first home buyers are always asking me for advice about how to choose the right property to buy.
To give you the best possible answers, I turned to industry experts to get their advice on how to choose the right property, and what you'll need to be prepared for when you make the important decision about your first home purchase.
I quizzed our panel of experts to get their key first home takeaways, and here's what our panel of experts had to say:
Real Estate Agent's Top Advice for Buying Your First Home:
First here's some top tips from our real estate agents, Scott McPharlin and Stuart Costello from Magain Real Estate.
These guys find the right home for people on a daily basis, so they have quite a bit of experience with what First Home Buyers need to look for.
Scott was eager to share his advice:
- Treat your first home like an investment. Your needs will change over the years, so choose a home that'll best increase your equity, making it easier to upgrade in the future.
- Make sure you have a home loan preapproval, and you've picked out a building inspector and conveyancer before you start looking for your home. Those that are prepared, have an advantage when making offers!
- Research research research research research research research and then research some more.
- Just because you can spend your maximum doesn't mean you should!
- The #1 way to increase your equity is to pay off the principle on your loan, so pay more than you need to each month.
Treat your first home like an investment - build equity to upgrade later.
Stuart Costello had a pretty tough time adding to this great list, but he did come up with a few additional hints:
- Try to buy homes close to amenities like schools, public transport, universities, hospitals and shopping centres, this will increase resale value of your first home investment.
- Offer what you are comfortable paying. If you've found your dream house remember that an extra $10,000 is approximately $9 per week extra on a mortgage.
- Bring your centres of influence (Mum, Dad, Grand Parents) to the open inspection(s) as you might not be able to have a second viewing.
This is a pretty comprehensive list, so I was wondering what our conveyancer would be able to add to it.
Conveyancing for Your First Property
Bruce Twelftree from The Conveyancing Centre has been a conveyancer since 1988, after a number of years in the Land Titles Office and Finance Industry.
I asked him about the role he plays in the purchase of a first home, as a lot of people aren't totally sure what a conveyancor really does. Here's what he had to say:
- "Conveyancers coordinate the settlement process from the date you sign the contract to the day you shift into the property.
- Your conveyancer will prepare all the legal documents required to have the title of the property transferred into your names. On the day nominated in the purchase contract, they'll and will attend to the settlement of your property, ensuring you take full rights of possession of your new home.
- I strongly urge you to make contact with your own independent conveyancer at the time of signing the contract. There may be clauses in the contract that are vague or you may not fully understand, remember the Agent is selling the property for the Vendor. You should obtain you own independent advice on the contract you are about to sign."
You can read more about the role of your conveyancer and the key dates you need to know when you buy a home by following the link.
This covers off pretty well why Scott and Josh recommend choosing a conveyancer before you look for your first home. So why do they recommend that you also have a building inspector?
Do You Really Need a Building Inspection?
I asked Anton Parr from Inspex Inspections for a recent case study.
It turned out that just last week he inspected a house in Glenelg that looked just brand new inside and out. However, on closer inspection, he discovered that the iron roof had been newly painted.
Paint can hide rust or decay
On the inside it was severely corroded, and would need to be replaced immediately. The ceilings had also been recently painting, hiding damp spots where the roof has leaked.
Anton finds things like this all the time, making getting a building inspection done before you buy an essential cheap protection.
Which brings me to the next important question that I get asked a lot - how much do these professional services cost?
What Is the Cost for Professional Services?
We'll look at conveyancing first.
The Total Costs of Conveyancying
A conveyancor will charge you a 'settlement fee' for his or her services, which usually comes to between $700 and $900.
The tricky part to be aware of is that there are other costs that arise at the same time as part of the conveyancing process that will need to be paid before the purchase settlement is finalised.
Some of the other charges that the conveyancer may include on their invoice will include:
- File Saver fee to securely store ID's for 7 years - our conveyancer charges $66, but this could vary.
- Bank cheques - these are usually about $12 each, and you would need about 3, making it cost $36
- Government Title and other searches to ensure your property can be freely sold. This usually comes to around $85 for the property purchaser.
There are two important taxes that your conveyancer will handle on your behalf at this time too. These are essential for the transfer of the property into your name so you hold the final legal title under the contract of sale.
- Stamp Duty - it's different in every state. You can get an idea of what it will cost with this stamp duty calculator.
- Land Title Registration Fee.
These are the charges outlined by our local conveyancer in South Australia, so remember that the actual costs might vary in another state or with another conveyancer - but it gives you a good idea of what to expect!
How Much For A Building Inspection?
To give you a ballpark figure on what a building inspection will cost, I checked with our local Adelaide Building and Pest Inspector.
The cost of the inspection depends on the size of the house and property that you are buying.
For a 3 bedroom home, a building and pest inspection will cost about $520.
If you are only looking to get a Building Inspection, this costs about $360.
Remember, these are just estimates, and your quote or final invoice could be different depending on the property you are considering!
You can always ask us any questions that you have
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You can also get in touch any time you need more information about buying your first home! Just contact us anytime you need info and we'll find answers to your questions.