Buying your first property can be a nerve wrecking experience. I remember the first time I bought a house – I chose to build a house rather than buying an existing dwelling. The main reason for this was that I couldn’t find a property that I liked in the price range that I was prepared to pay.
The truth of the matter is that I was under prepared when I entered the property market for the first time, and while it all worked out alright for me in the end, it was more due to luck than anything else.
So in order to help you avoid some of the pitfalls that I discovered, I have put together this list of big ticket items to consider when entering the real estate market for the first time.
1 – What is your budget?
You first need to workout what you will be able to repay each week whilst living a lifestyle that you feel you will be able to live for the next 20-30 years. Many people start out thinking that they will be able to tighten their belts and save money once they ahve a mortgage, however, I think it is better to attempt living this way before you enter into a mortgage so that you can be sure you will be able to achieve your saving goals.
2 – What will the bank loan you?
Ultimately the bank will be the one that decides exactly what you will be allowed to borrow. However it is important to realise that often the bank will offer you more than you need, so it is important that you have already done your own budget to ensure you don’t end up borrowing more than you need, or can afford to pay back.
3 – Have you had an inspection?
Many properties will have defects that will cost you money if you buy the house. Some will only be minor cosmetic things, while others will cost you a lot more money – things like termites or a sinking house can be very expensive to rectify.
Make sure that you get a professional to do a full inspection for you before you make an offer – it can save you a lot of money if they end up finding something.
4 – Where is the property located?
Is it close to public transport, schools, shops or other facilities? Is it convenient for you to get to and from work to the property? These are some questions you really need to consider before making an offer.
I have a friend who moved a fair distance away from his workplace and he ended up hating the extra travel time it was costing him. At first he was lured by the cheaper property price, but now he is spending an extra 2 hours every single work day in travel, and he is questioning his decision.