Your Tips & Experiences before and after for Purchasing First Ever Home in Sydney

Karaxela on 04/02/2018 - 20:49
Last edited 05/02/2018 - 09:22 by 1 other user

Hello ozb community!

It's a tough property market for the average Joe here in Sydney.. Me and my partner (no kids yet) have been working very hard and saving up for our first home purchase in Sydney which we feel we are ready for..because we are relatively young and inexperienced, we just would love to hear about your tips, experiences, struggles and successes associated with the pre and/or post purchase of your first home.

Would love to hear about your experiences on anything in general.. whether you have tips and strategies like what sources to use, negotiation, lifestyle & affordability pre/post purchase , identifying deals, opportunities and traps, or anything else in general.

TIA for sharing :)

Home & Garden

Comments

  • foxmulder on 04/02/2018 - 21:27
    +1

    Generally you have to set aside 5-10% on top of your house price for anything else that may arise. Just have it on your offset to reduce interest.

    Interest only loan payments (even generally only last a year) is also nice to have.

    • foxmulder on 04/02/2018 - 21:28

      And yes the truth is out there!

    • Karaxela on 04/02/2018 - 21:48

      Good point about having the buffer. An increase in rates is something we can anticipate but need to quantify and prepare for.

  • jug123 on 04/02/2018 - 21:30
    +2

    Dont over commit, rates will go up. May not be this yr but they will go up so make sure u can afford at least a 0.5% increase in rates. A lot of ppl are struggling now & will lose everything

    • John Kimble on 04/02/2018 - 21:52
      +1

      0.5%? You should allow for a bit more to be safe…

      • Euphemistic on 04/02/2018 - 22:34
        +1

        With rates at historic lows they really can only go up. When I first got a mortgage it was about 7% I got them to calculate for 10%.

        • jjjaar on 04/02/2018 - 22:57

          They're calculating at 7% at the moment which means they know it will go up to at least that at some point.

  • [Deactivated] on 04/02/2018 - 22:44
    -5

    you look for house
    you find house
    you buy house
    you move in into house
    you live in house

    not a hard concept, i think

    • aussie-bargainer on 04/02/2018 - 23:25

      The first and second steps are hardest

      • Euphemistic on 05/02/2018 - 06:41

        First step is easy, second is hard.

    • [Deactivated] on 05/02/2018 - 06:45

      Me and my partner

      I believe step 5 is the hardest

    • MrBear on 05/02/2018 - 08:17

      you upkeep house

      Many people forget they will need to maintain their house. Things will break, things won't be to your liking and will want changing, you will want to add new things. It all costs time and money and sometimes you have to pay much more than you think for a tradie to do something.

  • GC1 on 05/02/2018 - 07:36
    +6

    If buying privately, ask the Agent what they think the house will actually sell for vs asking price.

    Some Agents will say, "This house is great value at the asking price" and leave it there. Others will let you knowwhere the owner is at eg, "The owner will not accept anything less than $30k off the ask". Thanks Ms Agent, you just saved me $30K.

    If the owners have bought elsewhere make you offer a little less than you otherwise would - ask the Agent lots of questions about the owners to try to find out where they are at. Eg, sometimes the owner want a long or a short settlement - try to give them what they want and price accordingly.

    Don't be afraid to state your credentials eg, we have a $80K deposit and a pre-approval for $800K and we are ready to sign today/this week etc- you want to make sure the Agent knows you are serious and can complete the transaction.

    Present an offer as a 1st and final - never tell the Agent you can go higher (even if you can and will).

    Indicate you have a strong interest in a property but don't indicate you are in love with it/must have it.

    Orientation to the sun is important to me - North facing entertainment area is ideal. An East facing window to enjoy the winter sun is great eg, if the dining room is east facing - tick. A west facing entertainment area is a deal breaker for me.

    Get an idea now of how much changes cost eg, new paint, new flooring, add a room, new kitchen, new bathroom, landscaping. This will enable you to formulate an overall price when making an offer.

    Good luck - enjoy the experience.

    • Karaxela on 05/02/2018 - 08:48

      That's a detailed post! Thanks for your input.

  • jhmtaylor on 05/02/2018 - 08:33
    +3

    Always offer subject to finance, pest and building inspection. Building inspections are extremely important.

  • Karaxela on 05/02/2018 - 08:46

    Thanks will add that to my list

  • kkoc3 on 11/02/2018 - 10:19
    +1

    I recently bought one and below are some pointers highlighting how agents make the deal to favour themselves and not you (the buyer ) or even seller sometimes.

    Cooling of period - You can always ask to extend the cooling off period to 10 days instead of 5 days . Agents will ask sellers to put 5 days so that they can get the commission quicker - you will have advantage with 10 days as you can push for your loan unconditional approval and also organise other inspections like strata or building etc .

    Settlement date - Agents will always advice sellers for 4 weeks settlement on contract . You can negotiate 6 weeks this will give enough time for banks to settle on time . Remember your 4 weeks starts when you exchange the contract and not when your cooling off period expires.

    Exchange of contract - Agents can exchange the contracts if you expressly authorise them to do so. They will try and trick you to sign a form which will give them this authority . They wont clearly tell you what that form is therefore only thing you should sign is the contract and no other forms prepared by agents .

    Contract Signing - Agents will force you to sign the contract ASAP . They do this because they will get their 0.25% and to make the offer more attractive to seller . Here its your call as to how badly you want the property . I would never sign anything unless i have done my due diligence .

    hope this helps

    • Karaxela on 11/02/2018 - 10:47

      Thanks for your input. This is useful to know.

  • MadgeH on 11/02/2018 - 22:54
    +1

    Some great tips above. A couple of things I would like to add (and change)

    • In NSW the standard settlement period is 6 weeks (42 days). Depending on what suits you better, you can try and negotiate a longer or shorter settlement. Sometimes this depends on when your current lease expires if you're renting, or simply if you just need more time before you want to move into the property. This is done through your conveyancer/solicitor.

    • Cooling off periods are set as 5 working days as this is common practice in NSW. This is not when the agent gets their commission, agents get paid their commission at settlement. This is usually enough time to get your finance in order as well as your strata (if applicable) check and building/pest reports. There's never harm in asking for longer up front and these days most vendors are happy to grant it unless they've been burnt before where a buyer has taken 10 days and then not gone through with the purchase (this could be for a few reasons including not being approved for finance)

    • Your expenses will increase with having a property. Other than the obvious one of having a mortgage, you will have to pay council rates quarterly, your water bill will all be on you now when previously you only had to pay usage and the landlord had to pay the rest, home insurance, potentially strata etc. All these are not massive expenses but something to account for.

    • Depending on how much you're spending, you may be eligible for a stamp duty exemption or discount. This helps substantially and your deposit now can all go towards your purchase price - reducing the amount you need to borrow

    • Have your finance pre-approved. This is also called an Approval in Principle (AIP). This means the bank has done all their preliminary checks and the only condition of your approval is the valuation of the property (and mortgage insurance if applicable). This is important because the turnaround time with the bank will be quicker if they already have done all their prelim checks and we're working with a 5 working day cooling off period.

    • Lastly, have a good solicitor/conveyancer on your side. I have worked with some great solicitors and some very average ones. A good solicitor is worth their weight in gold because if they need to go in and amend some conditions in the contract, or if you need a cooling off period extension it helps to have someone who is proactive. Solicitors are generally more expensive than conveyancers but a lot of people don't know that there's actually a difference in what the two can do. If something goes wrong during the transaction (not often but can happen), the conveyancer will then need to send you to see a solicitor for advice.

    I hope this helps

    Hass

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