5 People You Need In Your Life When You’re Buying A Property
Getting your hands on a piece of the property market is a huge learning experience and one of the most exciting (and daunting) milestones you can achieve in your adult life. At the same time, the process of becoming a homeowner can be an emotional, financial and mental rollercoaster.
That’s why it’s important to have your property posse watching your back from the beginning of your property search through to settlement. And with these five people, you can keep your stress on the down low.
#1 Property search and inspection buddy
The beginning of your property-buying journey usually begins with your weekends packed with inspection after inspection.
While you may have the initial intention of sticking to your practical list of must-haves for your first property, this can all go flying out the door when you get a glimpse of a gardened courtyard and begin imagining all the weekend entertaining you could do in that space. You can forget the boring practicalities that need to be ticked off your list, whether it be proximity to transport and amenities, your optimal floor space and parking space or, when it comes to fixer-uppers, the cost and work required to bring them up to scratch.
So whether you’re buying solo or with a partner, it’s a good idea to have an extra set of eyes attend your shortlisted properties with you. This person should be able to kindly take off your rose-coloured glasses, provide the critical focus of an objective outsider and help you assess the suitability of these properties.
#2 Mortgage specialist/home-loan specialist
While we’re on the subject of keeping it real, another member of the posse you need to recruit is a mortgage specialist. A mortgage specialist will figure out how much you can borrow (known as “pre-approval”) and help you work out which bank is best for you, based on a range of factors. This could include the rates they’re offering, the potential set-up of the loan, and extra features such as credit cards or offset accounts.
Having an idea of how much you can afford to spend will assist you in filtering your property search and save you the time and energy of looking at properties you can’t afford.
As well as this, a mortgage specialist can give you an estimate of what your mortgage repayments will be and what you’ll have left from your salary after making repayments, which will help you envisage and prepare for life with a mortgage.
#3 Building/pest inspector
Your property will probably be your greatest asset, so you want to make sure what you purchase is physically and structurally sound.
You’ll be supplied a contract of sale for any property you want to purchase. You may want to negotiate some of the terms – this will need to happen before you try to buy the property
Hiring a building inspector to do checks on property will help assuage your fears that the property won’t collapse the moment ownership passes over into your name. In the same vein, a pest inspector will assess your potential property purchase and look for termite infestations and other types of chemical and fungal decay. Both will provide a report to you outlining what they have looked at and their assessments of each.
The cost of hiring an inspector can hit hard on the hip pocket, with an inspection ranging from $400 to $1000. This cost can really accumulate if you have a few properties on your watch list. It’s also common for the person selling the property, or their agent, to supply reports, but you’re still likely to have to pay around $300 for them.
On the other hand, how much is too much for peace of mind and knowing that you’ve made an informed property purchase?
#4 Property lawyer (or, conveyancer)
You’ll be supplied a contract of sale for any property you want to purchase. You may want to negotiate some of the terms – this will need to happen before you try to buy the property. This applies to both auction and “for sale” situations. The conveyancer will ensure the contract is fair, advise you on what to change and communicate with the property seller’s legal team.
Once the auction gets going, your auction buddy can act as your check against emotional bidding.
However, it’s after you’ve signed the contract that your conveyancer really steps in and works their behind-the-scenes magic to have the property transferred to you and registered in your name.
During the settlement period, your conveyancer will contact the relevant government authorities to apply for transfer of title and apply for any First Homebuyer Grants or stamp duty concessions you may be eligible for. They’ll liaise with the vendor’s legal representative on your behalf, notify the council and water supplier of the change in ownership and speak to your nominated bank to ensure that the funds for the purchase will be ready on settlement day.
On settlement day, your conveyancer will meet with the vendor’s conveyancer. The keys are handed over to you, the property is settled and (hurrah!) officially, you’re a home owner.
#5 Auction buddy
If there was ever a time you needed someone to hold your hand, it’s at an auction. Fast-paced, thrilling and anxiety-inducing, the bidding at an auction can be unpredictable. What should a first time buyer do then to level the playing field? Enlist an auction buddy.
If you’re planning to bid at an auction, get informed about the auction process. Speak to someone who has first-hand experience and can talk you through the whole process, or go and watch some other public auctions to get a sense of the process.
On auction day, know your limit for the property, and have your auction buddy on hand as emotional support. It can be nerve wracking while you wait in anticipation for the auction to start, eyeing off your competition and wondering what their maximum bids might be.
Once the auction gets going, your auction buddy may also act as your check against emotional bidding, stepping in and reminding you when you’ve reached your agreed bidding limit.
Alternatively, if the stress gets too much, ask your auction buddy to bid on your behalf.
For something as big as buying property, you’ll want the right people beside you supporting you and ensuring you’re following the right steps. The above is also a general overview of the processes and each process involves many more aspects – and potential complications. If you’re ready to start looking for a property, check out these five golden rules we’ve learnt.
Sylvia Tran is a former number cruncher now working in consumer law enforcement. She lives in Melbourne.