4 TIPS FOR TODAY’S HOME BUYERS

Buying a home is a big step! There’s a lot to consider, from the merits of buying over renting, doing your research, inspecting a property, making an off„er, contracts and settlement.

For easy reading, here are 4 top tips for today’s home buyers.  Or if you want to take the mystery out of the home buying experience, download the Harcourts Buyers Guide to uncover the various processes you need to know from start to finish.

1. Sort out your finances

Start planning early!  Create a budget to determine what you can realistically afford to spend on mortgage repayments or to start saving towards a house deposit.  How much deposit will you need to buy your home?  Most lenders will require you to have a 20% deposit for your home loan. For example, if you wish to purchase a home worth $700,000, you would require an $140,000 deposit. However, some lenders have loan products to borrow up to 90% of the property value.

Mortgage advisors or brokers are absolutely brilliant and can help you find the best lenders.  Their fees are paid for by the lender, not you, so it pays to speak to one at the beginning.  They will approach lenders on your behalf to get written finance pre-approval so that you know what price range you can look at for your new home.  Given your income and financial commitments, banks will provide a pre-approved amount (to which terms apply) beyond which they would not lend.  This gives you a ceiling for the maximum you can spend on buying your first home, so you can start house hunting!

2. Do your research

Once you have worked out your borrowing capacity, and perhaps sought pre-approval on your home loan, it is now time to get to know the market.

Start to look at neighbourhoods that would suit your needs and your budget.  A great place to start is online.  There are lots of property comparison websites, like www.homes.co.nz that will give you an indication of the average sale price of houses, lands and units in the area.

Also take a look at how the neighbourhood has fared over the last 5 to 10 years.  Have prices steadily increased, stabilised or been in decline?  These figures can help you to determine if the property will be a good investment over the long-term.

Once you’ve found a location that fits your needs, and fits in with your average price range, start to look at properties on the market.  Compare features, price and land size.  Give me a call to help you find the perfect property or to recommend a local Harcourts sales consultant.  We know the area we work in very well, and can also give you advice on what the neighbourhood is like, if there are any new infrastructure projects planned, and how prices have changed over the last few years.

3. Inspect Properties

Take advantage of an open home and use the time to perform a thorough property inspection.  Later on, you’ll want to engage the services of a professional to inspect the building’s structure, but it is a good idea to use your initial tour of the home to perform your own inspection.

At the open home, focus on the dwelling’s structure, the neighbours and the location.

Is there any damage from pests, poor construction, wet spots on walls or ceiling or cracks in the foundation?  If you’re not entirely sure what you’re seeing is cause for concern, and you are interested in the property, the best course of action is to enlist the services of a qualified building inspector.

While you are at the property, take a look at the neighbours on each adjoining border of the property for any clues you might not be comfortable long term.  Are the neighbours’ yards neat and tidy, and would they reflect poorly on the area should you ever sell?  Do they have pets?  Are there dogs barking non-stop during the inspection or are animals loose or roaming?  Do you have a comfortable level of privacy?

Location means more than the general neighbourhood, take a look at the property’s exact location for things that may bother you long term, hurt re-sale value, or cause lifestyle issues.  Is the property on a busy road, next to a retail or commercial space, power lines?  Is the property on a flood plain?

These are just a few considerations to look into when going through an open home.  After inspecting a property, continue to do your due diligence.  Start to research any areas you’re still unsure of, and if you decide the home is the one for you, enlist the help of an independent building inspector to inspect the property and provide you with a building report of their assessment.

4. Make an offer

Once you’ve found the perfect property for you, it is time to make an offer.  Depending on the type of sale, and even the region you live in, the process of making an offer can vary.  The only way to make a formal offer and avoid any confusion is to make your offer in writing.  We will provide you with a contract to start the process which will also highlight any conditions of sale.  Your offer will then be presented to the sellers by the listing consultant.

Common conditions of sale are:

  • Finance
  • A builder’s report
  • A Lim report
  • Sale of another property
  • Solicitor’s approval of the contract

The offer will be prepared on a standard approved contract and you will be asked to sign the required number of copies, however we urge you to seek legal advise prior to signing any sale and purchase agreement.

The seller can accept your offer, reject it or counter sign it.  Counter signing usually occurs when the seller is not satisfied with the price and/or conditions offered and subsequently alters them.  The contract will be brought back to you for your consideration.

 

Why is “the 30 Day Rule” so important to your selling price?

Properties that fail to sell within the first 30 days of their marketing campaign risk losing value because most buyers lose interest after this period. This is usually a result of bad preparation and unrealistic expectations. Failing to use recent comparable sales and market listings in the area is a crucial mistake – buyers are usually aware of recent sales and properties currently available. Using market insights, research and having a finger on the market’s pulse, my team and I can provide you with a realistic and responsible appraisal. Many agents that don’t have sound instincts about where the market is heading and will often over compensate and inflate price recommendations to win the business – out of panic or desperation – price should always be based on expectation on comparable properties and market conditions.