Buying real estate for the first time can feel quite intimidating. You’ve got to deal with sellers and their agents, rival buyers, banks and lawyers. And it’s not always clear what role each of them plays in the process.
As a first-home buyer, you have access to many professionals who can help explain the various tasks and processes required to buy a home. Don’t feel like you have to walk through the experience blindfolded.
To help, here’s a short guide for first time buyers.
Start saving
That means not only reducing your day-to-day spending but also working to reduce regular payments on debts for items such as a car. These obligations will reduce the amount of money a lender will allow you to borrow.
Work out a budget
Investigate how much you might be able to borrow. Factor in the expenses of buying a home, such as legal costs and moving. You should then have an idea of what you can afford. Setting your expectations early on will focus your home-hunting efforts and avoid disappointment.
Arrange financing
Spend time exploring your options. Some banks demand a 20% deposit; others are more flexible. Perhaps your parents will go guarantor for the loan, or part of it. Consider using a mortgage broker as they will guide you and recommend suitable loan options. And they don’t charge you a fee for their advice as this is covered by the lender.
Pre-approval is good
A lender won’t give you a pile of cash based on your salary. They’ll grant “pre-approval”, which means you can make a monetary commitment with confidence. However, the lender will finalise its approval once they’ve valued and approved the property you intend to buy. Do not sign any document that waives your right to pull out of a transaction if your lender ends up refusing you.
Get mentally prepared
With your finances lined up, you need to think about the dynamics of buying a home. If you find your dream place, you better believe others will love it, too, especially in this market. So, be prepared to move quickly to beat the competition.
Go hunting
House hunting is fun but exhausting. In a hot market, it can get stressful because of buyer competition. Don’t be put off, and keep your focus. You may miss out on a few properties, but there are always more out there.
Be confident
When making an offer for a home, be confident. You have every right to make any offer, but be realistic if you want the property. Don’t low-ball to see if the seller bites. They won’t, and you’ll be labelled a time-waster and go to the back of the queue.