With the booming property market in WA and the basic price of a home reaching around $350,000 home buyers are finding that purchasing a home is almost out of reach for those in the low to middle income bracket and especially first home buyers. Entering into the property market has never been more important than in recent years to build equity and realize the 'Aussie dream' of owning your own home. If you are in the position of buying a house in WA then there are some important steps to follow for successful home buying.
Firstly get yourself a pre-approved home loan before looking at properties. This will give you an advantage over other home buyers that may be interested in the same property as you plus you will have more negotiating power. Shop around to find the best interest rates and a loan type that suits your circumstances. Make sure that the properties you are looking at are affordable in comparison to your income, monthly expenses, loan repayments and any future increases in interest rates. As a general guide, loan repayments should not exceed 36% of your gross monthly income. Lenders will want you to provide evidence of your income, savings and deposit history to secure a home loan.
Identify the search parameters of the type of house you are looking for including the number of bedrooms, bathrooms, living areas, outdoor entertaining, size of the block, whether you need a carport or garage, a new or older style home? Ask yourself what your favorite suburbs are and which locations actually fit into your buying budget. Do they have the local facilities that you need such as medical, banking, shops, trades and services, restaurants, video stores, post office and schools? Once you have worked out the type of house you are looking for and the location, then research the papers and internet for listing prices and the prices properties in those areas have recently sold for.
Negotiating a Sale Price
When you have found the ideal home for your needs then with the help of a buyer agent, or if you are dealing directly with the sellers agent you will need to decide on a starting offer. Compare recent home sales in the same area to the sale price of this home and its specifications, a reasonable first bid offer can be 5 to 8% lower than the listed price. You can negotiate the sale price with the seller from there, if any repairs need to be done to the home then factor this into the sale price.
Once the sale price has been agreed upon by both parties then a settlement date needs to be set, usually 45 to 60 days from the contract signing date. Make sure that your offer is subject to finance being successfully obtained and a house inspection report being completed prior to settlement. Thus if any significant construction or pest issues are discovered the sale can be re-negotiated and repairs made, or the offer to purchase rescinded. A deposit of 1 to 10% of the purchase price is usually required at the time of signing the contract and is paid to the agent to be held in trust until the property is settled.
Buying Tips
Ã?â‚??Insist on a pest and building inspection being carried out prior to settlement
Ã?â‚??Check and more importantly ask if there are any illegal building additions that have been made to the property ie. completed without local council approval.
Ã?â‚??Also ask if the property has any restrictions or covenants.
Ã?â‚??Identify all the costs associated with buying the home including stamp duty, settlement agents fees, legal fees, loan application fees, council rates, water rates, title transfer fees, building inspection costs, removalist fees, re-connection costs of utilities and add these costs into your budget.
Ã?â‚??Include a settlement inspection in your purchase contract list of inclusions to be carried out 1 to 2 days prior to settlement. This way you can ensure the property is in the same condition as when you viewed it at contract signing. If any repairs need doing then confirm this in writing with the seller.
Ã?â‚??Make sure that everything discussed and agreed to with the seller and their agent is put in writing, citing all purchase conditions and inclusions on the contract of sale.
Buying a home is a big investment emotionally and financially, being prepared throughout the purchasing process will help you avoid many common pitfalls that unwary buyers face.
? Brendan Leahy Real Estate
www.blre.com.au
