A guide to buying your first home

BUYING a house can be a fulfilling experience, but it can also be overwhelming for first-time buyers.

This is according to Bill Rawson, chairman of the Rawson Property Group, who says knowing how to recognise the right house when you find it and make an appropriate offer is often tricky if you don’t have any previous experience in the market.

Navigating the seemingly complex process of getting home loan approval and transferring ownership can be stressful for the uninitiated as well, but as with most things, he says a little preparation can go a long way.

Rawson says one of the most important things a first-time buyer can do is familiarise themselves with the market and the process of property sales before jumping into anything.

Buying a house isn’t complicated, but there are a lot of elements that need to be considered for the most successful outcome.

He says the first element to consider should always be affordability “ not only what kind of financing you qualify for, but also how much you can spare from your monthly budget for all those additional expenses like rates, insurance, repairs and maintenance.

He says it’s always wise to be conservative with the size of your home loan, especially as a first-time buyer with interest rates on the rise.

You’ll need to make sure you have enough money left over after your home loan repayments to cover any unexpected expenses, and that you’ll be able to handle an increase in your repayments if the lending rates continue to climb, he says.

Don’t forget that you’ll probably also need cash for a deposit, as well as legal fees, home loan fees and transfer costs.

Rawson says once you know how much you can afford, it’s time to start familiarising yourself with the market to get an idea of the type of property you can expect within your budget.

He says it’s a good idea to put together a checklist of ˜must-have’, ˜nice-to-have’ and ˜don’t-want’ features so you can compare properties on the market to properties you would be interested in buying once you’ve had time to get to know the lay of the land.

If it’s possible, take your time to look around at various properties in your price range before you consider making any offers. It’s helpful to have that context when you do decide to make a purchase because you’ll have a better idea of the going rate for properties with similar features, he says.

Rawson says you must approach an estate agent in your area of interest at this stage to assist you in narrowing down your search to houses that best suit your requirements.

Property listings very seldom have all the details you need and you may visit ten different two bedroom houses where only one of them has all the items on your ˜must-have’ list. A good estate agent will be able to do that legwork for you and save you a huge amount of time by only taking you to houses that meet your needs.

Rawson says once you’ve found a home that fits the bill in a neighbourhood that you’re happy with, it’s time to make an official offer. To do this, you’ll sit down with the seller’s estate agent and fill out an offer to purchase agreement. Feel free to ask as many questions as you need to feel comfortable with the paperwork.

An offer to purchase is a binding agreement, so make absolutely sure you understand the terms and that you want the house before you sign anything, he says.

You may need to add some suspensive conditions, like making the purchase subject to home loan approval or a successful home inspection if one has not already been performed. The seller’s estate agent will be able to help you add these conditions, but if you’re unsure of anything, have your lawyer look over the documents.

He says to not be too surprised if the first or second offer you make on a home is unsuccessful. This is common, and although disappointing, can help you adjust your expectations to make a more appropriate offer next time.

If your offer to purchase is accepted, you’ll need to start the ball rolling on the finance side of things, and using a bond originator can make this process a lot less time-consuming.

A bond originator will approach all the financial institutions for you and present you with the best options to get your financing approved as quickly as possible, says Rawson.

It’s a free service, and there isn’t a downside to taking advantage of it, but you can always approach the banks yourself if you prefer.

Rawson says once your home loan is approved and registered, and any other suspensive conditions have been met, the seller’s attorneys will handle the rest of the transfer process and you’ll be asked to sign a few documents.

The transfer process can take up to three months, but the official date of transfer is usually specified in the Offer to Purchase and Deed of Sale agreements. On this date, your bank will pay the balance of the purchase price (after the deposit) to the seller (or the seller’s bank if there is an outstanding loan), and the house will officially be transferred into your name.

With that done congratulations are in order as you’ll finally be a homeowner. Pop the bubbly and enjoy a glass before you start planning your big move, he says. Property24.com