Real estate expert Lyn Cox shares her two-cents on how you should prepare your property search.
Before going on a grocery shopping trip, many of us will go through a bit of a process or a series of preparatory steps.
Check the pantry. Check the fridge. What’s the fruit and veggie situation? Cleaning products? Research specials on offer. Review any recipes you might be thinking of using in the coming week. Get the shopping bags ready. Check the wallet or credit card. And so on.
You should think about shopping for property in the same way. Plan and prepare.
There are several things you can sort out before you start looking for a home to buy. The following are not presented in any strict chronological order. In fact, they may even be underway simultaneously.
Step 1: Sort out the finances
The first step towards finding your new home is speaking to a finance specialist, such as a finance broker, to sort out the finances.
Before you start shopping in earnest, secure ‘approval in principle’. It’s easy to get carried away with the fun part of buying a property – looking at houses – but gaining pre-approval with a lender will give you confidence about how much you can afford to borrow and what deposit you may need.
Don’t be afraid to let the selling agent know you have conditional loan approval in place. When you do find the house you want, you can present to the seller and agent as a prepared applicant who is serious and reliable. It shows you mean business and gives them peace of mind that your financing will not fall through. Arranging financing as an afterthought adds immense pressure to the process of shopping around for the right loan and gathering the paperwork to prove you can service the loan. It always pays to be organised and have pre-approval in place.
Step 2: Set your budget and start saving
This isn’t guesswork. You should be talking to professionals who can help you to understand your borrowing power. You need to determine if you’re eligible to borrow money from a lender. You certainly don’t want to find out after you’ve made an offer that your credit history or deposit is not up to scratch. Budget knowing how much you can borrow and how much your repayments will be over what period. If you already own property, you should be aware of what equity you have.
Then begin saving. The earlier you can begin living like you already have that mortgage the better. Put aside the mortgage repayments without fail. Not only will it get you into the habit, but it may boost your savings. You will get a good idea as to whether the level of repayment is a suitable match with your current lifestyle.
Step 3: Do your research
Have a thorough look into the areas that you would like to purchase in. Become very familiar with the average prices in the area and the type of homes that fetch those prices. Consider all the amenities and services including transport, schools, parks, sporting facilities, medical facilities and shopping centres. Think about them in terms of what’s important to you now and in the future.
Next to last: get off the computer. Don’t confine your research to the screen. Attend open homes and auctions.
Step 4: Recruit an expert team
You are going to need a few professionals along the way, including finance specialists, real estate agents, conveyancing lawyers and building and pest inspectors. Get the best that you can.