how to buy a house: before you buy

This is how to buy a house, part 1!

Consider this your property-buying bible! John and Emily, hosts of my millennial property, recorded a 3 episode series outlining the entire house buying process and we think it’s worth sharing! It’s suitable for both first home buyers and property investors alike.

This is part 1 in the series - the before part of buying a house:

Follow along our 3 part blog series that outlines everything you need to know!

Support your purchase with a sound financial house

Before pressing go on buying a house you’ll want to ensure your financial foundations are solid. Glen James from my millennial money has created the sound financial house - a diagram that outlines a great way to structure your money and affairs so you can get out there and start working on your goals with your money in gear.

Mindset - be confident!

Conviction is a powerful thing! Be determined that now is the time to buy. It can feel daunting to start the process, but pluck up as much confidence and courage as you can. If you’re buying with another person or your partner, check in with each other so you’re on the same page and utilise your combined motivation to get in the game. Also, be prepared to share the load as a team.

Saving a deposit

We’ve prepared a whole blog with tips for saving a house deposit - it’s what most people think about first, and if possible, maximise your savings by spending less than you earn (freeing up as much cash for savings) and start saving as early as you can!

Cash on the side

Aside from your deposit, you’ll want some cash set aside to support the hiring of professionals relating to your purchase. You’ll be paying a pest & building inspector, a conveyancer, and any other inspectors you want to come and take a look at your desired property. You’ll also need your removalist costs set aside, as well as cleaners for where you live currently. Perhaps you want to do a bit of DIY before you or a tenant moves in? Pile up some cash for that. You’ll most likely have some building and contents/landlord insurance to fork out for as well. You might also want to splurge and grab a bottle of champagne to celebrate your new place once you’ve snagged it so pop (get it?) some dollars aside for the fun!

Pre-approval + lending in place

You NEED pre-approval. Do not go out house hunting without it. For this you need a rock solid mortgage broker - don't rely on online lending calculators. This mortgage broker will be your friend for a while, so pick someone you can work with long term - you’ll be coming back to them for future rate reviews and potential future buys. If you need help finding a mortgage broker, reach out to our team.

Be wary - assess your lending capacity against your budget. Don’t spend more just because you can based on the lending options available to you. If you’re pre-approved for a large amount, you don’t have to spend it all. Pre-approval lasts 90 days, then you reapply, so get pre-approval right when you’re about to start making offers on properties.

Conveyancer

A conveyancer covers all the paperwork and legalities involved in buying and selling properties. They’ll be your go-to for contracts and conditions. Get one in place when you’re lining up your mortgage broker - they’ll be talking to each other once you’ve found a place to get the ball rolling. Your conveyancer needs to be registered in the state in which you are purchasing or you need to use a lawyer - generally most conveyancers will be registered in one state only.

Prepare for a compromise

Make a list on your phone of the things that are non-negotiable, and the things you’d be willing to compromise on. There’s no perfect property out there, sadly. But, if you’re prepared with what you’re willing to make a trade off with, you’ll find the search process smoother, and you won’t be disappointed when you have to choose between option A and option B.

For owner occupiers the purchase is definitely a more emotional one - it could potentially be where you want to live for a long time, or perhaps your kids will go to school in the area. A compromise for this may be willing to buy something a bit older, maybe in need of a bit more DIY, in order to get your kids into a certain school zone. Think strategically about the things that really matter to you and focus on those throughout your search.

read part 2