Buying a House

Buying a House

Buying a house is a big and expensive decision, a decision that most people only make a couple of times in their lives. I recently began the expensive and extensive journey of building a house I listened to the suggestions and experiences of others and I think that is what helped me through the lengthy process. It is easy to be deceived and confused when looking at buying a house and from the beginning I was aware of what to look out for: the hidden and extra fees, sale spins, the fact that display homes more often than not are filled with extra costs and many more tips I have compiled in the below article.

My partner and I started our journey by writing a list of what we wanted in a house, our aim was to meet 80% of the wishes on our list. Choosing a suburb was easy we didn't want to have to move far from where we lived now and our budget was clear. The biggest question we faced was: to build or buy? Everyone has their reasons for and against, we chose to collate these on our own by thoroughly researching both choices.

Together we spent endless hours on real estate websites looking through listings and choosing certain houses to visit. After some time, we decided to look at display homes, we then decided to build. Whilst still looking at homes we began looking for land. Choosing a display home proved to be easy, although we walked into over 150 display homes, we chose one of the first homes we walked into. Finding land was definitely the hardest part choosing a block that was perfect, in the right price range and that our house would fit on proved to be extremely difficult.

Looking at established house prices gave us a good idea of the market within our suburb of choice, it also allowed us to determine what prices we should spend on house and land and what re-sell value could be.

When looking at the price of established homes keep in mind that if the price, for example, is $320,000 plus, it really means only offers around $350,000 will be accepted. Don't be deceived by the word 'plus', by law it cannot mean more than 10%. Soon enough the word 'plus' will be obsolete as it is will be enforced that agents are not to advertise using a 'plus'. When looking at house prices also remember to include stamp duty, as this can be a very expensive on top of the initial purchase price.

If you choose to build, it is a good idea to look at what house and land packages builders offer because they may already have land, in a perfect location and when combined as a package builders often include free upgrades and overall the cost is lowered.

It is very important to have a budget, actually sticking to it often proves difficult but it is important to work with what you can afford. Work out your finances ensure that you have accounted for all costs. Account for government taxes, stamp duty, fences, council levys and conveyancers or solicitor chargers. Council levys could include $900 fees for builders to obtain building approval. Stamp duty is paid on the full price of established homes and on the land when building. Investigate the cost of home and contents insurance and loan protection you will have to include this in your budget too. Remember when building you will be up for more costs as the house is built, these include: fly screens, curtains, gardens, driveways, shelving, removalists and other items not included by your builder.

You need to calculate what you can afford to pay per week, fortnight or monthly on your loan. Keep in mind you will have other costs: bills, insurance, rates, food and you still need to have spare money for presents and other costs such as car servicing. Remember that interest rates increase and you may need to add more money to your loan in the future. If applicable research the first home buyers grants for your state, this extra money can help with upgrades, loans and gardening costs.

When looking at land or to buy a house think about which way your house is facing: where will the sun hit? Will the sun warm up your bedrooms? Will the sun cause the family room and kitchen to heat up and become unbearable in the hot Australian summers? Will the clothing line be accessible by the sun?

Stand on your land, or inside your potential house can you hear the road noise? Is the railway line so close you can hear trains? Is your house near traffic lights? Normal drive by noise isn't that loud, the noise comes from breaking and accelerating, which is apparent at traffic lights and intersections. If you are happy with the traffic noise, continue to research the area, just because there isn't a traffic light intersection now, doesn't mean there won't be in the future. Speak to the council and ask what the future development plans for the area are, you can also search on the internet for future plans.

When looking at purchasing land, ask if there are any easements on the land, if you have an easement on your block you cannot build anything permanent on that particular area, or you may have to pull it up. Find out when the land is titled or released, does this fit in with your timeline?

Land and the estates now often have covenants this is to ensure that the whole estate looks clean and similar. Covenants are building rules you have to follow they can include details such as the height of your roof pitch, garage door, ceilings and garage size. Ensure you and your builders understand the building regulations ask your builder what they are as they determine how close you can build to your fence and other measurements.

When you decide to build your home, one of the first questions you need to ask is: will you go with plans, a display home or have an architect draw up your house plans? Display homes are great to walk through regardless of your intentions you can obtain ideas of what you like and what you don't. The best thing about display homes is you can see what the house will look like, how big the rooms actually are and the layout. If you have an architect draw up your plans you can chose exactly what you want, you choose the size of the rooms and where everything is situated.

Think about what suits you, but also think about re-sell value. If you only plan to live in the house for a couple of years think about what suits you and ultimately what suits other people. Re-sell value was important to us which is why we chose a three-bed-room home, even though there is only two of us.

When looking at houses, think about how safe the house is. Open all cupboards and doors to check they are working. If the established house needs work, consider all costs, would you need to add extra TV points? Are all the lights working? Are there any extra costs you need to add to your budget on top of the purchase price? Check that all extensions, gazebos, pergolas, decks and large sheds have council permits this should be a part of your contract, ensure your solicitor thoroughly checks these certificates.

When looking at display homes keep in mind they have added extras to make the house look better, for example often on display are 9ft ceilings, 8ft ceilings are standard the bigger ceiling height is used to make the house look bigger overall. The price they promote is a basic package and it is very basic, a lot of the accessories are extra. Keep in mind that you will need to purchase fly wire screens, toilet roll holders, curtains and pay for additonal electrical work. The basic electrical package includes only one light per room and a couple of power points.

If you find a house you like, ask the price, then have the sales person walk you through and point out what is and isn't included in the standard package. Ask your builder about a construction loan, this is known as progress payments, which can usually allow you to receive some extras as inclusions.

People often spend more money on their home after going to a colour appointment. This happens because included in your price are category one colours and styles, but you may like the bricks from category three, which means you have to pay more.

When you have chosen your perfect property, before signing any contracts read them yourself and have a solicitor or a conveyance read them too. Solicitors know exactly what they are looking for and can provide you with a report of anything in the contract that may be of a worry to you. Before paying any fees to builders, real estate sales, or land sales ask if the money is refundable.

When looking for finance ask for all fees to be stated up front, for example if there are any establishing fees and if there is a fee if you pay off your debt early.

You need to have savings for house and land deposits before you can purchase a home and ask for a loan. Lenders normally only lend a maximum of 95% of the house price, some lenders only lend 90%. As said above, determine what you can pay per week then see how much you are able to borrow. If you borrow more than 80% of the total price you will have to pay mortgage insurance mortgage insurance is a one-off fee that protects the banks the only way to not pay this, if you have less than 20% deposit, is to have another house as guarantor. For more details speak to your lender.

Remember don't rush your decisions, know what you want and understand that it is a very expensive investment. Truth be told we met 100% of the wishes on our list but we did go over our budget slightly? although it was justified.