First Time Homeowner? Here’s What You’ll Need to Know

Looking to purchase your first home? We know it can be somewhat scary and overwhelming, so we’ve compiled a list of everything you’ll need to know so you can relax and enjoy the process.  

Determine a Realistic Budget 

The first and most important step is to determine a realistic budget that takes into account your income, your savings, future costs and if you are eligible for a grant.  

It is extremely important to properly and thoroughly budget how much you are willing to spend, and be strict in your decision making. Once you set your budget, stick to it! Don’t let the possibility of a pool, or a walk in closet distract you from the fact that you set a budget for a reason.  

Firstly, you’ll want to think about how much of your savings you are willing to use towards a house, and calculate your loan/borrowing capacity. Speak to a mortgage broker or lender to realistically determine how much you will be able to borrow. This will be calculated through your income, assets, expenses, savings and credit history.  

After determining your borrowing capacity, you will want to consider and factor in other costs of home ownership such as strata fees, insurance, legal fees, inspections, renovations and council rates.  

Finding The Right Property 

 Now comes the fun part! Finding the perfect property will encompass a lot of market research and consideration about what you want in your home and finding a good location. Remember that it is your first home, and whilst it might be nice to have a north facing balcony, it might not be necessary. Stay flexible. Firstly, you’ll want to figure out where you want to live. You should consider the suburb’s proximity to your work, schools, grocery shops, if you’ll need a car, public transport routes, future building and development plans, and trends of how the value of properties in the area have grown/diminished over the last 10 years. This will help you decide if a property will be a good investment long term.  

You will also need to consider what features are necessary inside your home. Consider functionality vs design; perhaps the white carpet and fabrics won’t be functional for children. Big trees are beautiful but require a lot of maintenance. Swimming pools are great in the summer, but require cleaning and maintenance.  

If you find a property you like, make sure you visit it more than once before putting in an offer, and properly consider all the aspects of functionality. If you have any doubts, step back and re-evaluate your concerns with a clear mind. Remember, there will always be another house, so there’s no need to rush into a purchase you are not entirely comfortable with. 

Home Buying Process 

 So you’ve found the perfect property and you’re ready to put an offer in. Congrats! Here’s what you need to do to lock it down, and start living your dream life in your dream home. Properties are typically listed for auction or private sale.  

 A property sold by private sale will have an asking price and no specific end date to the campaign so you will typically have enough time to view the property multiple times, conduct inspections and research the area before putting in an offer. If your offer is accepted, you should pay the deposit and exchange the contract of sale as soon as possible to confirm your purchase. The contract will usually state a cooling-off period in which you can back out of the purchase if needed.  

At auction there is no set price advertised and the property is sold to the highest bidder, as long as it meets the reserve set by the sellers. There is no cooling-off period, with a deposit paid and contracts of sale signed on the spot. Therefore, it is especially important to go into auction with a very strict budget, so you don’t get overwhelmed in the moment.  

Overall, you should take a whole range of factors into consideration before purchasing your first home, from budget and financing options, to location and functionality. Most importantly, try to enjoy the process!