March 29th, 2017 4:38 AM by Jackie A. Graves, President
considering how expensive it is to buy a house, that everyone would take time
to research, to equip themselves with the knowledge to ensure they are making
the right decision.
To rule out
any opportunity for error.
But time and
time again, buyers become emotionally invested in a home, buying the 1st or 2nd
property they have viewed, with little understanding of the market, whether the
price is right and underestimating the overall expense.
Here are six
important things you should consider before buying a home:
is the sales price?
true cost of buying?
How safe is
Are there any
location right for you?
shows that you need to commit to a house for a minimum of 5 years for it to
become financially viable. It’s an investment that could set you up
financially, placing you in good stead to upgrade in the future. Unless, of
course, you fail to do your homework. A bad purchase could be the greatest
financial mistake you’ll ever make.
So – to avoid
the latter – here are the 6 most important things you should consider before
buying a house:
1. How accurate is the sales price?
If you want
to avoid paying an over-inflated price for a property, you need to understand
the local market. Research the sold prices of at least 5 similar houses in the
area. You can scour sales results in the Sunday newspaper, or search online via
realestate.com.au or Domain. Take into consideration the size of land and
condition of the property. To eliminate some of the hard work, sign up for the
realAs app which will bring accurate price predictions to you.
2. What’s the true cost of buying?
It’s not just
the sales price you need to worry about. Understanding the total costs
associated with buying a house is an important part of the buying process.
There’s stamp duty, agent fees, bank and legal fees, in some cases Lenders
Mortgage Insurance if you’re borrowing more than 80% of the property. You
should also consider the ongoing expenses such as mortgage repayments, council
rates and insurance.
varies from state to state. It’s generally calculated using a sliding scale of
taxation based on the value of the property. Calculate the accurate cost for
stamp duty for a particular property. If you’re a first homebuyer, you should
be eligible for stamp duty concessions, but these vary considerably depending
which state you live in.
should cost between $1500 and $3000, depending on the complexity of the
purchase. A conveyancer will prepare the necessary documentation and manage the
settlement process for you as well as providing advice about the specifics
within a sales contract.
calculated according to a property’s value, location, type and features. Rates
vary considerably, so it’s a good idea to find out what you’ll be paying before
buying a house. Call the local council or ask the sales agent responsible for
repayments. Over the lifetime of your loan, these will be your most expensive
cost. Consult a mortgage broker or research online to explore the different
loan options before buying a house. It’s also a good idea to draw up a personal
budget. Make sure you understand your outgoings. Realistically, what repayments
can you afford?
costs are calculated based on risk. Properties within high crime pockets, or
areas susceptible to flood or bushfires will have a higher insurance price tag.
For contents insurance, you may want to include fixtures and fittings when
obtaining a quote.
3. How safe is the property?
property located in a high-risk flood or bush-fire zone? What are the crime
stats for the area? Some properties are more vulnerable to robbery than others,
especially if they’re located in high crime areas, or they have little security
and easy street access.
4. Is the property adaptable?
situation can change dramatically over 5 years, so it might be a good idea to
check the restrictions associated with a property. Down the track, you may want
to renovate or expand. What’s the classification of the property? What are the
setback regulations from the street and bordering areas of the lot? Are there
strata or height restrictions?
5. Are there any building defects?
for shoddy renovation works, or properties with faults or water damage can
become expensive. If you don’t have the time to organise a building inspection,
read our blog post 6 warning signs why you shouldn’t buy that house for tips of
what to look out for when viewing a property.
6. Is the location right for you?
You may have
fallen in love with the house, but location is equally important. Make sure the
neighbours are friendly, and that nearby facilities suit your needs. Listen out
for noise pollution or any unusual disturbances that could become a headache to
your everyday lifestyle. Read our post 5 Location Nightmares to avoid the most
common location mistakes.
should be one of your biggest investments, so don’t make the mistake of ‘buying
blind’. It’s easy to feel pressured by time, competition and market conditions,
but these factors should not become an excuse for making poor decisions.
checklist with you when viewing properties and make sure you have all the
answers before buying a house.
By by Gemma H
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