Tired of renting… is it time to buy?
The aspiration of buying a home has long been entrenched in the Australian psyche. Whilst it’s commonly agreed that renting is cheaper than buying, over the long term the equation works out roughly the same.
Figures from finder.com.au reveal that renting a home in Australia over 30 years will cost almost $1 million, while buying at today’s current median house price will end up costing about $1.2 million.
Whether it’s to invest or live in, if you’re ready to enter the property market, there are some fundamental steps to undertake to prepare for this major investment to ensure the process goes smoothly.
- Save for a deposit – most lenders require at least a 10% deposit. So keep your savings on track whilst you consider the next steps.
- Find out how much you can borrow. A mortgage broker can assist you to research the market and determine your borrowing power. Remember to factor in additional savings for stamp duty and other fees and ensure you can meet monthly repayments, especially when interest rates rise. Consider whether you want to go for a fixed or variable-rate deal.
- Research your area. Are you making a lifestyle choice, or considering an investment property. For what may be your biggest ever financial outlay, visit the area, keep to your budget and be patient until you get the right property for you.
- It’s important to understand the differences between Auction vs private sale. Prior to auction, establish the potential selling price and consider there is no ‘cooling off’ period. By contrast, at private sale you are aware of the asking price and may be able to negotiate some of the terms of the contract.
- Make contact with an agent who can guide you through the process. If you see a property you want to look at, call the agent and arrange a viewing. MICM Property sales have over 20 years’ experience in the property market and support you in every step of your purchase. Negotiate with your agent to find a price that will satisfy both parties.
- Finalising paperwork takes place after your offer has been accepted. Make arrangements with your broker or a lender to sort out your mortgage application, and give your solicitor instructions to work on a contract of sale. To assess if the property has any problems, it’s important to arrange a valuation survey. Usually your lender will make arrangements for this, however you can also ask for the same surveyor to create a homebuyers report for you. This will inform you of any major work that needs doing and give you the opportunity to raise this with the seller and renegotiate the sale price or continue to undertake quotes to complete the work.
- Contracts are exchanged after your solicitor or conveyancer has checked the paperwork. Once the deposit is paid and the date of sale is agreed to, it’s time to book your moving van, pack boxes and plan your move.