When it comes to purchasing your first home, there are many things to consider and lots of decisions to make.
It can be easy to overlook the most important parts of the process, so here are six first home buyer tips to keep in mind.
Tip No. 1: Talk To Your Parents
Getting a deposit together is still one of the biggest challenges for first home buyers. So, how are so many overcoming this to enter the market every year?
More than half of first home buyers get help from their parents. This is typically in the form of a gifted deposit or guaranteeing your loan with their property, in which case you don’t need a deposit at all.
Tip No. 2: Inspect Lots Of Homes
Another challenge first home buyers face is not knowing where or how to start the process.
The key is to inspect lots of homes. If you look at lots of homes, including ones you don’t like, it will help you decide what you want and what homes are worth. Most people don’t end up buying in the suburb they first wanted. Many buy farther out from city centres because of affordability or simply to get more acreage.
Tip No. 3: Use Comparable Sales
Compare the house you like to recent sales in the same area. This is exactly what bank valuers do to work out what a home is worth.
There are property listing websites such as Domain and realestate.com.au that provide this information for free. There are paid services such as CoreLogic’s RP data that provide a more detailed view.
Inspecting lots of homes and using comparable sales are two of the best ways to understand the market.
Tip No. 4: Ask Great Questions
You can find out a great deal about the properties you’re interested in simply by asking the real estate agent questions.
- Why is the owner selling?
- Are there any properties that you think I should see?
- What homes will you be listing soon?
Of course, take everything they say with a grain of salt.
Talking to the neighbours will often clue you in on valuable information on the property and the area as well.
Tip No. 5: Buy In An Emerging Suburb
There may be big infrastructure projects planned in an area – like a new railway line or road – which would mean more government spending and jobs coming into the area. Or a demographic shift could bring young professionals with good jobs into an area.
If your suburb improves, then your home goes up in value more than others; for example, when the second Sydney airport was announced, land prices in Badgerys Creek went up 30% in 12 months.
Tip No. 6: Apply With The Right Lender
It’s unlikely that of all the lenders in Australia, the bank you are already with is the best lender for you. A good mortgage broker will figure out your needs to determine who can approve your loan and give you a great deal.
For more tips and the step-by-step process for buying your first home, sign up for our free online First Home Buyers Course.
Top Tips From Recent First Home Buyers
When we asked some of our recent first home buyers what tips they would give a friend, here’s what they had to say:
- “Spend a lot of time going to open houses, auctions, etc.”
- “Use a parental guarantor if you can.”
- “Raise as much deposit as possible.” “Save, save, then save some more. The larger the deposit the easier it will be when the time comes to buy.”
- “Get pre-approval, even if you aren’t sure you’re going to buy.”
- “Buy established.”
- “Do proper research.”
- “Get a good mortgage broker. We thought we wouldn’t be able to purchase a home and we did.”
Buying property is likely to be the biggest of the big-ticket purchases you’ll make, so it’s important to get it right. So, here is a first home buyers guide to help you on your home buying journey.
Get Pre-approval Before Looking For Homes
Most vendors/sellers will not seriously consider offers from borrowers without pre-approval. If you decide to make an offer before you apply, you can’t be sure you’ll get approved in the event the seller accepts the offer.
Speak with one of our award-winning mortgage brokers to get pre-approved for a home loan by calling us on 1300 889 743 or by filling in our online assessment form.