4 tips for buying your own property

4 tips for buying your own property

Spring is arguably the best time to buy a property. If you’re considering buying a property, here’s what you need to know. 

1. Consider using a buyer’s agent 

If you are looking to buy a property, you may wish to consult a buyer’s agent. Buyers agents generally come from a finance or real estate background. They are not just for wealthy home buyers. Buyers agents service a range of budgets including first and family home buyers. As the current Australian real estate market is so competitive, a buyer’s agent might be able to help steer you in the right direction. Their fees are generally around 2% of the purchase price, or they may negotiate a fixed fee. This cost includes sourcing the property, carrying out inspections and handling negotiations. You may also get access to properties that are not on market through a buyer’s agents’ connections. Accessing a property before it goes to market may also help you to get a better price.  

2. Consider the hidden costs of buying a property 

Inspection Costs – Before you buy a property it is wise to arrange a building report and pest inspection. If you are buying an apartment, get a strata report that looks at the strata record to get a better understanding of the building’s history of repairs, and other information. 

Stamp Duty – Stamp duty is based on the purchase price of the house and varies for each state in Australia. You can get an idea of what your stamp duty would be based on your budget by visiting your government and territory website.  For WA, https://www.wa.gov.au/organisation/department-of-finance 

Lenders mortgage insurance – If you are borrowing more than 80% of the property’s value you may be charged mortgage insurance. It is a once off premium that protects the lender and is added to your overall home loan.  

Title transfer – State governments charge fees for transferring the title of the property to the new buyer.  

Mortgage registration- There are state charges for registering a mortgage. 

Building and contents insurance – If you are obtaining a mortgage, you will be required to pay for building insurance. This will protect your home from any disasters. You should also strongly consider contents insurance.   

Moving and Utilities – Don’t forget the costs of moving and setting up your new accounts for gas, electricity, internet and water. They may not be much but they should be factored in. 

3. Consider the future expenses of buying a property 

Interest Rates – Whilst interest rates in Australia are low at the moment, they won’t be forever. They are tipped to rise in the next 2 years. If you have a variable home loan, you may find your repayments rise significantly. An extra 1% rise could result in an additional $270 a month on a $500,000 home loan.  

You may need to consider switching to a fixed home loan before lenders increase their rates, however you need to be aware that additional repayments may not be possible.  

Strata Levies – Consider how much your levies are, you may find they are more expensive than some council rates. Your strata levies pay for the maintenance of properties including electricity, insurance, repairs and cleaning. Apartment blocks that include a lift or secure underground parking may be even more expensive. 

Council Rates – Home owners pay the local council every quarter or annually based on the value of your land.  

Maintenance – Set aside some money for maintenance on your home.  

4. Do your research on the area 

Underquoting properties has been a big issue in 2021. It has been disappointing for some, inspecting a property only to find out the agent underquoted to engage interest. Agents are required by law to publish an indicative selling price, however they don’t have to disclose the reserve price before an auction. It is important to do your own research to work out what a property is worth. Look at recent sales in the area and compare block sizes to estimate the cost per square metre. Then factor in the build. Certain features of a build will boost the price, such as solar panels, double glazing, landscaped gardens and its proximity to transport.  

Happy house hunting! 

Need help with your investments? Contact us here.