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Thread: Buying a House.

  1. #1
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    Buying a House.

    Gday Guys,

    So I am a 22 yr old first home buyer. Been looking in recent months at buying a house. Now before people start, yes I have finance organised, I know my area, budget, style and restraints.

    What I have no freakin idea about and where my questions lie is, after I find a place that I like, whats the next step so I don't get screwed over. A few questions to consider:
    How far under the ticketed price would you generally offer?
    What is the next step re contracts etc?
    What sort of inspections should I be getting done?
    What is a brief outline of the process, timeline of events etc?

    I know a good real estate agent will tell you all this/help you through it, good ones are hard to find sometimes though, and just want a heads up on what to expect from people that may have been through this recently.

    Cheers,
    Josh

  2. #2
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    Hey Josh,

    I bought a house pretty young as well and god damn it was stressful!

    Offer what you think its worth, but have a building inspector look over it first, and see if you can get an apraisal from your bank / lender BEFORE making the offer. The last think you want if for the vendor to accept your offer and your lender turn around and not want to lend you enough becuase they value the property lower.

    Take pictures, write everything down.. keep it all together and take it all with you. Its handy to be able to refer back to other places you have been to, liked didn't like etc.

    Suburb trending etc is very useful but remember that most places will sell below their advertised price.. which skews the trending.

    Gather up all your ammo and have it with you when you make the offer. Things like if your lender values the property 30k less than advertised is good for barganing - anyone who wants a loan will not be able to pay more than that. Get quotes for any repaires needed which come up in the building report, have them handy with you. Get the cost of termite treatments etc as well. Add it all up and compare.

    When you go to make your offer you can say 'hey there are 2 places I'm looking at (you can even show them you folder ) your place would cost me X and Y, similar places have recently sold for N, so my offer is Z." If they don't accept, you can pull out your lender apprasal and say " well the bank values it as A, and won't lend above the market value."

    Most vendors will be in tune with the market, but want to most money they can get. Real Estate agents want to sell the property in good time, but are paid with commission. If the propertly has just been placed on the market, 99% of the time will be for more than market value. The agent / vendor expects some barganing to go on. 6-12months on the market and they are most likely not accepting offers and want to wait 'untill someone wants to pay'. The amount of time I've heard people say 'Oh its worth X but there are no buyers wanting to pay that at the moment' hehe well yes, they either want to sell it or they don't.

    If they don't accept the offer, just wait or move on The trick is not to get emotional and take your time. I looked for 2 years before I found the place that ticked all my boxes.. I had two building inspections done and still ended up with what was apparently and 'illegal' kitchen (the hutch was 50mm too close to the cooktop) so you can't rely on others to everything for you.

    The only people that I found to be helpful throughout the process for me was my bank (well credit union - CUA). I was buying it by myself and was a bit terrified by it all. Realestate agents and everyone else just want your money now, CUA wanted to keep me as a customer long term.

    What is the next step re contracts etc?
    Talk to a conveyancer or solicitor..

    What sort of inspections should I be getting done?
    Building inspection, pest inspection.. Check its history for flood and fires etc. I assume its for a house and not an apartment?


    What is a brief outline of the process, timeline of events etc?
    it took a few months. It was 6 weeks between contracts exchanged to settlement. Expect to do some leg work

    oh, and good luck!
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  3. #3
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    G'day Keefe88

    If you are looking at an older home, remember that Termites don't particularly like hardwood framed/roofed houses,too tough,and in and around your location drainage will be an important issue and watch for Fibro roofed houses.

    I grew up in Norman Park,with builders/carpenters in the family


    cheers

  4. #4
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    Some good advice there!
    When taking pictures at various opens, best to ask agent first, its not usuallt acceptable to take photos of property that is not yours even intent to purchase is there.

    Know your budget and do a stress test, which is can you still afford it if interest rates go up by 2 more %.

    Is it for you to live or investment, if the latter, buy with your head not the heart. Buy on big block, see if you can value add later by adding on or sub dividing and check local council for any local restrictions.

    If its for you to live in and stay, allow for stamp duty, furniture etc.
    Allow for maintenace and allow to beer to invite us for a bbq.

    Good luck mate and you are doing the right thing, wish I had bought more when I was young.

  5. #5
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    Quote Originally Posted by UncleHo View Post
    G'day Keefe88

    If you are looking at an older home, remember that Termites don't particularly like hardwood framed/roofed houses,too tough,and in and around your location drainage will be an important issue and watch for Fibro roofed houses.

    I grew up in Norman Park,with builders/carpenters in the family


    cheers
    Thanks for the advice UncleHo. Will defs be getting the building inspections done. Unfortunatley for me I won't be buying around Bulimba/Norman Park/Hawthorne, wish I could, but way outta my price range. I'll be looking down the southern end Logan/Eagleby/Bethania. Thats where I work, but its also a huge growth corridor at the moment and far more affordable for me.

    Cheers,
    Josh

  6. #6
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    Quote Originally Posted by flagg View Post
    Hey Josh,

    I bought a house pretty young as well and god damn it was stressful!

    Gather up all your ammo and have it with you when you make the offer. Things like if your lender values the property 30k less than advertised is good for barganing - anyone who wants a loan will not be able to pay more than that. Get quotes for any repaires needed which come up in the building report, have them handy with you. Get the cost of termite treatments etc as well.

    When you go to make your offer you can say 'hey there are 2 places I'm looking at (you can even show them you folder ) your place would cost me X and Y, similar places have recently sold for N, so my offer is Z." If they don't accept, you can pull out your lender apprasal and say " well the bank values it as A, and won't lend above the market value."

    The only people that I found to be helpful throughout the process for me was my bank (well credit union - CUA). I was buying it by myself and was a bit terrified by it all. Realestate agents and everyone else just want your money now, CUA wanted to keep me as a customer long term.
    Thanks for all your advice mate. Some very handy hints in there. I have a very good and trustworthy bank manager (family friend), so I am aware what is affordable and achievable, with no rubbish talk. It's time to fly the nest and get away, I've always wanted my own home, worked and saved hard since my first job throwing papers lol.

    Cheers,
    Josh

  7. #7
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    G'day Keefe88

    My advice stands for anywhere in SE Qld and Nthrn NSW
    also look as far south as Tambourine Village


    cheers

  8. #8
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    One other thing to remember is, depending upon your current living arrangements, to allow time to actually move in.

    If you are renting, you will be aware of all of the things that need to be done once you move out. From past experience, 2 weeks overlap is about the minimum. But also remember that there will be a lot of money leaving your bank account during this period, so dont forget to allow for it.

  9. #9
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    Hi keeffe88,

    try to put any spare money into your mortgage as often as you can
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  10. #10
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    Quote Originally Posted by extreme View Post
    Hi keeffe88,

    try to put any spare money into your mortgage as often as you can

    This is good advice. Also, if you are payed fortnightly, then pay your mortgage back fortnightly. And round it up.

    For example. If your normal monthly repayment is $1987.00, then the best thing to do is to think of it as $2000 per month. Lets face it, are you going to miss $13 per month in your pocket?

    Now, make a $1000 payment each fortnight. This equates to $26,000 paid per year, as opposed to $24,000 if payed monthly. The extra $2,000 each year will come straight off your principal, greatly reducing the amount of interest incurred.

    The other thing to do, is to have a loan off-set account. This means the interest that is gained is paid straight into your mortgage. So, there is extra money going off your loan, and you don't have to pay tax on it. Anyway, you never had it to start with, so you wont miss it.

    And last bit of advice, make sure you can withdraw on your mortgage if you need to, but make sure the minimum amount is reasonably high, like $5,000 or so. This means that the extra money you put into it is still available if needed, BUT if you have to take a large amount out, it had better be for something worthwhile. And no, a new 3D plasma tv doesn't count.


    As a slight afterthought, don't forget about insurance on your new house. Once your offer has been accepted, it is best to start the ring around. In a worse case situation, if you have signed a contract on the house, and it is accepted, if the house then burns to the ground, you MAY still have to go thru with the purchase. but have a discussion with the insurance people. You don't need to insure it for the purchase price, as you are buying land as well as a house. But you do need to allow for demolition, clearing & re-building costs.



    If you have made it this far down, well done. And now the fun begins.

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