Buying Property
Excitement, pleasure, pride. These are the feelings that buying a property can bring, whether it is your first home, your next home or an investment property.Choosing the right property for you comes down to knowing what you need, knowing what you can afford and knowing what's available at the time you are ready to buy. It means the property you finally buy is like the one you had in mind when you started out - or as close as possible.
Knowing what you need.
Although it is obvious, it is sometimes overlooked. The type of property you buy should reflect the purpose of the purchase and the lifestyle you are planning for your future. Will you be living in or renting out the property? If moving in, consider the following:
*Household numbers and whether they will change.
*The needs of each person in the household now and in several years time.
*The sort of local amenities required and how close they should be.
*The sort of work and leisure activities that you engage in.
*The length of time you expect to live in the home.
*The features you want in the home, in order of importance.
Think about these questions and discuss them with anyone else who should be involved. Priorities are important because you may need to compromise on some points. Jotting down the answers will produce a check list of your real future needs, which can become your guide to the sort of property you buy and where you buy it.
Knowing what you can afford.
Assuming that you are going to need one, the size of your home loan will normally depend on answers to the following questions:
*Your income or incomes.
*Any other commitments such as credit cards, hire purchase and personal loans.
*How long it will take you to repay the loan (the term of the loan), and
*The interest rate being charged over the term of the loan.
Two other important factors are:
*Whether you have enough money saved or available to pay a deposit on a home.
*Whether there will be enough money left over to pay for all your normal daily living expenses.
The larger the deposit you can put down on your home, the easier it will be to buy it. In any case, it will generally have to be between 5% and 10% of the purchase price depending on your borrowing capacity and the policy of the lending organisation.
Don't forget to budget for the other costs of buying a home:
*Legal expenses.
*Lender's fees.
*Government charges - eg stamp duty.
*Inspection costs -eg building and pest inspections.
*Insurance.
*Moving costs.
*Utilities - eg connecting gas, phone, etc.
When all the calculations are done, you will know what you can afford. It is important not to get overcommitted and, recognising this, lending organisations generally cap their loans so that the repayments are around 30% of your gross monthly income.
Shop around the various lending organisations to find out exactly what you can borrow and on what terms. They will establish if you are eligible for one of their loans, do their calculations based on your income and expenditure profile and then apply their lending policies.
You will find a lot of variations in loans available and it is in your interest to search for the loan that suits you best. You can approach the lending bodies individually to discuss your needs.
Once you have found the right loan to suit your needs, get it pre-approved or pre-qualified. In either case, you will be showing that you have access to finance, which is a big advantage because:
*You can show real interest quickly in a property that you want.
*It will give you an edge over other buyers for a quicker and more definite settlement.
*You will be able to make offers and bid at auctions with confidence, maybe just that bit faster than someone else who wants the same property as you do.
Knowing what's available.
There are thousands of properties being offered on the market so if you've worked out what you really want; you've got a head start.
Newspapers, city, local and give ways, are a good place to begin. The Internet is fantastic, visit particular suburbs and looking around is also a great way to find out what's available, then, start going to some open homes and auctions. Soon you will get a feeling for what is available, the number of buyers in the market (demand) and what different properties are worth. Before long you will feel ready to buy.
Knowing local values.
Research sales in the areas you are looking and may be attend many auctions of properties to help establish current values. Attend as many open homes as possible. Ask Rod Martiska for additional advice.... he will happy to help.
Methods of Sale.
Private treaty and auctions.
The great majority of properties are sold by the two most common methods of sale - private treaty and auction.
Private treaty.
In a private treaty sale, either with or without a publicised price, you make an offer through an agent to the seller and, if necessary, a negotiation occures until you and the seller reach agreement.
Auction.
A sale at an auction occurs in one of three ways:
*Before the auction itself, if the seller accepts an offer.
*On auction day, at the fall of the hammer to the highest bidder.
*After the auction, if not sold at the auction.
Concluding a Sale.
Once your offer has been written and negotiations are finalised you will sign a sale & purchase agreement and pay a deposit; usually 10% of the sale price. Copies of the contract will be sent to your solicitor and yourself.
Settlement Day.
Settlement day is when the ownership of the property is transferred to the successful buyer.
The property is now yours.
Congratulations!
