Congratulations! You’re this close to becoming a homeowner. However, before you put your name on the dotted line, sign the documents, and hand over the cash to the esteemed owner, there are still a few essential details you need to consider.
Whether your future home is brand-new construction or an older property, there are surprisingly many areas where things may not go in your favor—even after an inspector has carefully examined the property. So, what are these things? Read on to find out.
In recent times, there has been a lot of excitement around virtual viewings and the question of whether or not they will become the industry standard. Having a live or pre-recorded property tour is a terrific way to shortlist the houses you are interested in purchasing. Nevertheless, there is no substitute for visiting the property with a reliable real estate agent to discover any possible flaws.
Things to Know Before Buying a House
Understandably, house buying is billed as one of life’s most significant milestones. Therefore, before making an offer, one must be one hundred per cent sure that the home in question is “the one.” With so many possibilities available, how does one find their ideal match? Neighbourhood research. This way, you can be confident that you are making a property investment that satisfies your long-term requirements. To weed out the duds from the diamonds, start with the following questions:
How would you rate the local property values in this area?
Is the neighbourhood suitable for children to play in?
Is the location of the property convenient to critical facilities?
Are there any facilities for public transit that are available?
Are the necessary amenities and routine utilities accessible?
Will you be able to get immediate help in case of an emergency?
If you’re new to property ownership, check out our tips for property investors.
Property Inspection
As the potential buyer of a pre-constructed property, you might be concerned about whether or not you have overlooked important details. Of course, nobody wants to put their hard-earned money into a property only to spend a fortune on structural repairs within the same year. How can you be sure that the pre-built house is worth the money you are shelling out? A housing inspection checklist is a simple way to measure your investment against the property.
Room Size/Spaciousness ☐
Building Structure ☐
Stubborn Water Stains ☐
Corrosion Control ☐
Mold Prevention ☐
Plumbing and Parking Area ☐
Electrical Outlets ☐
Doors and Windows ☐
Floor and Tiles ☐
Check and Understand the Direct and Indirect Costs
Instead of worrying about unnecessary stuff, it’s better to consider all the silent costs of buying a home. (No, we’re definitely not referring to a home loan).
Since the prices aren’t simply up for negotiation during the purchase process, this may be extremely terrifying for first-time buyers. These costs continue to come up even after you’ve moved in. Before putting your name on the dotted line, understand the following direct and indirect costs—often overlooked by homeowners—and weave them into your budget:
Total Purchase Price
Total purchase price refers to the amount paid upon the sale of a specific portion of real estate. This price takes into account the number of Acquisition Fees as well as all liens and mortgages attached to the property, but it does not include points or prepaid interest. To put it another way, it is the sum specified in the Deed of Sale but not included in the price of the Building Contract.
Property Insurance
In the context of insurance, property insurance refers to a collection of policies designed to safeguard an individual’s belongings while providing coverage for the obligations. Renters insurance is a kind of property insurance that you can purchase. The replacement cost, the actual cash value, and the extended replacement costs are the three different forms of coverage available for property insurance.
Stamp Duty
Stamp duty is a kind of tax levied by the various state governments from the property owner. The amount is determined by the state or territory in which you reside and the property’s price. Stamp duty costs an average of tens of thousands of dollars for every Australian. That’s on top of the initial down payment, the monthly mortgage payment, and other costs associated with buying a home.
Conveyancing or Solicitor Fees
Conveyancing fees are paid to a legal practitioner to oversee the buying or selling of a property. In contrast, solicitors’ costs are paid for legal services, including salary, expenses, disbursements, and any extra liabilities imposed due to a real estate financing agreement. In Australia, the fees may vary from $400 to $1,400 and can go as high as $2,200 for a highly complex transaction.
Valuation Fee
The standard protocol calls for a valuation report when a property is sold, acquired, or refinanced. The valuation fee is paid to a professional valuer for preparing the report. Having said that, the majority of valuations in Australia cost between $300 and $600, and the majority of valuers will provide the client with a standard three-page report of their findings within two or three days.
Council Rates
All property owners within a municipality are responsible for paying a portion of the costs associated with maintaining local roads, council buildings, and public open spaces (parks and gardens). These costs add up to more than 100 different services the council provides. Council rates in Australia and other countries are determined based on the valuation of the owner’s underlying property.
Stamp Duty on Transfer of Title/Mortgage
Generally speaking, you must pay transfer duty (stamp duty) if you buy a home or when somebody transfers property ownership to you. Simply put, when the real estate owner is transferred, a stamp duty payment is required, determined by the property’s worth. In most cases, it falls somewhere in the range of 1 to 3.5 per cent. If sold, a transfer fee is charged based on the contract price.
Renovation or Repairing Cost
Repair or renovation cost refers to the amount paid for any work done to a pre-constructed property to improve its condition without making any structural alterations or changes to more than fifty per cent of the building structure. This type of work falls under the “repair or renovation category.” However, note that the act of reconstructing or enlarging anything is not included.
Lenders Mortgage Insurance
Lenders Mortgage Insurance, often known as LMI, is insurance that a lender takes out to protect themselves against the risk of not collecting the outstanding loan sum if the property is sold for less than the current loan total and the borrower is unable to make their loan payments. On a home loan of $500,000 (with a saved deposit of $50,000), LMI might cost you more than $10,000 in Australia.
Building and Pest Inspections
Before acquiring any property, you should be sure to get it inspected for both structural damage and infestations. During a house check, it is essential to have a building and pest inspection performed to verify its current condition. Combined, both services start at $460 Inc GST in Australia; however, this price might vary based on the kind of property, its size, and the renovation state.
When you believe you are ready to become a homeowner, it is crucial to identify the most critical things to consider when buying a property. As was previously said, there are several aspects to take into account, including your level of preparedness, the circumstances of the market in your area, and the need to ensure that you are familiar with the essential aspects of the home-buying process. As you enter the world of house ownership, you’ll be sure to have awareness and mindfulness.
The Bottom Line
For those of us who have years of expertise under our belts, the real estate market can be a challenging environment to navigate, whether this is your first time purchasing a house or you have done so in the past. Now that you know the top three things to check before buying a house, it’s time to work hand-in-hand with a reliable real estate agent to make the process a breeze.
If you’re looking for a property in Dalby, Chinchilla, Blackbutt, or Surrounding areas. #1 Property centre has you covered. Home is one of the most valuable assets; no team appreciates this more than we do. Interested in learning how we make every Australian’s real estate dream a reality? We’d be happy to have a chat over coffee.
#1 Property Centre
0746 626 535