Buying Information

EXCEEDING YOUR FINANCIAL LIMITS

Financial stress is horrific. It tears families apart.  The most important financial question to ask yourself before you buy a home is: "What is the worst that can happen?".  Can you afford another interest rate rise?  What happens if your mortgage loan is based on two incomes and you lose one income?  Think of the future.  Your financial limit today will not be the same as your limit in the future.  It might be better, however, what if it's not?  Don't borrow beyond your means, play it safe.  Make sure that when you buy your new home you will be able to keep it.

IGNORING EXTRA COSTS AND HIDDEN COSTS

The extra costs of buying a home can add as much as ten percent to your purchase price.  These costs include State Government stamp duty, legal costs, inclusions such as floor coverings, blinds and curtains.  Then there are the hidden costs, such as rates, taxes, insurance and  maintenance.  These costs all add up and some of these are ongoing costs.  The price you pay for your home is not the final cost, it's the first of many costs.  Make sure you know what they are and that you can afford them.

FAILING TO RESEARCH THE AREA

If you intend to live in your new home for many years, take some time to check out the area before you buy.  Visit the area and make sure you like it.  Check the prices of recent sales, visit some of the local amenities such as shopping centres, parks, cafe's etc.  When you find a home you love, don't be shy about inspecting it more than once.  Inspect the home on different days and times, this will give you insight concerning noise and traffic.  Finally, check out the neighbours, introduce yourself, find out about the street.  Research is always time and money well spent.

PLAYING THE "BLUFFING" GAME

If you decide to make an offer for a home you like, be aware that the lower your offer the less chance you will have of buying the home.  Often it is best to make one offer - your best offer.  Make it in writing and state that you either cannot or will not pay any more.  Be careful if you play the "bluffing" game, it can easily backfire on you.  You don't have to pay more than you can afford, just don't be too clever or else you may miss the chance to buy the home you love.

NOT GETTING INDEPENDENT INSPECTIONS AND ADVICE

It is essential that you obtain an independent building inspection report.  Be sure you discover any major faults before you buy the home.  Be careful of using anyone recommended by the agent.  Some agents receive kickbacks from advisors they recommend.  Be sure to get legal advice before you sign any contracts.  If in doubt about the price, then consider obtaining an independent property valuation.  The few hundred dollars you'll spend could easily save you thousands later.

BEING TOO QUICK OR TOO SLOW

The right time to buy a home is when you find the right home at a price you can afford.  This can happen on the first day you start looking or it can take weeks, even months.  Don't hesitate to buy if you find the right home, however, don't be pushed into making a  hasty  decision.  Take the time to make sure everything feels right.  Whenever that happens, then that is the right time to buy.