In the second installment of our tips for first home buyers series, we delve deeper into the nuances of assembling a strong support team and conducting due diligence before making your purchase. Buying a home is not a solo journey; it requires a collaborative effort with seasoned professionals who can guide you through the intricate process. From the importance of enlisting a conveyancer and a building inspector to the strategic advantages of working with a buyer’s advocate and a mortgage broker, this section emphasises the critical steps and expert advice needed to navigate the property market successfully. Additionally, we stress the significance of reviewing contracts of sale and not skimping on building inspections, ensuring you make informed decisions and avoid costly mistakes.

Tip 10: Buying property is a team effort

Buying your first home involves a series of distinct but interconnected projects; the property search (by far the biggest project), arranging finance, buying a property and organising the legal transfer of the property. 

Seasoned property investors usually have a team of experts to help with all of this and first home buyers typically need far more support and help. 

So engaging experts to help with all of this will help a first home buyer to:

  • Save time
  • Minimise the stress/hassles;
  • Avoid any nasty mistakes that increase the costs (for example, buying a property that needs to be re-stumped or has a big body corporate levy due). 
  • Ensures you are buying property that meets your needs at a price you are prepared to pay and can afford. 

The experts you will need (or ought to consider) are:

A conveyancer/lawyer – who is responsible for ensuring the smooth transfer of the legal ownership for the property you buy from the vendor across into your name and you would get to review the Contract of Sale for properties you are seriously considering.

A building inspector – To conduct a pre-purchase building inspection and give you an in depth assessment of the condition of the property. 

A Buyer’s Advocate – Lots of people buying property do it without a buyers advocate.  But a good buyer’s advocate will help you with the property search and purchase. An advocate’s understanding of the market is such that they will be able to quickly identify whether what you are looking for is achievable, and if not, highlight the trade-offs you need to consider for a purchase to happen.  They are also the best placed to bid, or negotiate, for the property in a way that increases the odds that you get the property and pay no more than is necessary.

Buyers Advocates can often find off market opportunities and they are certainly better at assessing the value of a property, what it is likely to sell for and negotiating the purchase.

The cost of a Buyers Advocate can vary widely depending on the service you engage them to perform but I would recommend using a good buyers advocate in most cases if your budget allows.

The final member of your team is a great Mortgage Broker. Over 70% of all home loans are arranged by mortgage brokers.  Great brokers educate you on finance and home buying as well as arranging a loan to suit your needs. When looking for a great broker here are the questions you should be asking before engaging them.

Tip 11: Always review a Contract of Sale

When you start to find properties that you might want to buy, you need ask the real estate agent for a copy of the Contract of Sale.  This is the legal document that you sign when you buy a property.  It sets out information that the Vendor is legally obliged to disclose about the property and the conditions for the sale. If you know how to read the contract it contains a wealth of information you ought to be considering.  For example if you are buying an apartment, is the Body Corporate considering any one-off levies to cover the cost of major repairs or refurbishments to the building.

We strongly recommend that purchasers get the contract reviewed by a licensed conveyancer or lawyer to check and guide you on all the key components, special conditions, general conditions and vendor disclosures affecting the property.

They can then advise you on the risks you’re taking on with each property, as well as the rules of how the sale will happen. If you sign the contract without having the contract reviewed, you’ll be agreeing to whatever is in the document, like it or not.

Tip 12: Skip getting a building inspection at your peril

Buying your first home is one of the biggest financial decisions you will make. So you do not want to cut corners when doing your due diligence for the purchase.  

A pre-purchase building inspection will provide you with an in-depth assessment of the condition of a property. By inspecting its foundation, plumbing, walls and structure, your inspector will be able to report on any major faults, defects or renovations which may impact the building’s value and as a result help you determine what price you are prepared to pay for the property or whether you should skip the property and move onto the next one.

I have seen clients walk away from a property based on an adverse building report (as they had neither the appetite nor budget to get the issues identified resolved. But equally I have seen clients renegotiate the price of a property down to allow for the cost to fix up the defects identified.

The cost of a building inspection is a small price given the size of the investment you are making.

For more useful tips for first-time buyers, check out part one of our 30 Tips For First Home Buyers here and our First Home Buyer page in the knowledge centre here.

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