How Do You Buy A House
For many of us, this may seem like a silly topic, but until you have done it once or twice, the answer is not that obvious. I have purchased a few properties and as a mortgage broker, deal in the process on a daily basis. To say that I am still filled with trepidation when I have to enter into negotiations myself or get set for finance, would be an understatement. I cannot promise to take those feelings away, but hopefully, by giving a bit of guidance on the process, your stress levels will come down to a manageable level. Purchasing a home or an investment property should be a fun, and exciting time, with a bit of guidance and preparation it should be. Below is a timeline of how I think you should go about buying a house.
1. Make The Decision: We are buying a house!
2. If Applicable Run it Past Your Accountant or Financial planner: See below Leveraging Off Experts.
3. Make Contact With A Reputable Mortgage Broker: This will follow the following timeline.
• An initial phone call, running through a snapshot of what you want to do.
• Client Interview, a meeting to ID you and get essential information, as well as run through products that may suit you, in detail.
• The application put together by broker
• Application run through with the client and sign up, application lodged
4.Source A reputable Conveyancer And Property Inspector: See below Leveraging Off Experts.
5. Go House Shopping: Be relaxed, have a list of must-haves, and nice to have. Update it regularly through the process.
6. Negotiate With The Realestate Agent: Have a maximum number in your head and don’t get swept up in the moment. You will normally submit an offer on paper, make sure your conditions, like your unconditional finance date, are on there.
7.Sign Contract: Make sure all your conditions are in your contract. Always sign subject to finance approval and always leave ample time to go unconditional.
8. Organise A Property Inspection, And Have Your Conveyancer Look Over The Contract, In Your Two Day Cooling Off Period: This is the time to have a look and check all the things you want to about the property.
9. After Cooling Off, Period Pay Your Deposit: You are happy with your inspection reports and want to move forward. This is where you now pay your deposit.
10. Broker To Collect Final Requirements From You To Attain Unconditional Finance: Normally, lenders will have approved a deal Subject to a few conditions, this is the point where these documents are collected or things actioned.
11. Valuations Ordered: If the valuation has not been ordered, this is usually where it would be. Your Mortgage Broker should handle this for you.
12. Broker To Meet With You To Do Final Loan Sign Up: Here we go through the loan in detail again, we look at the options you have chosen and how this affects you. We check that all is crystal clear before sign up.
13. Settlement to occur: The best day is when all your hard work has paid off. Enjoy every moment, and hopefully, you have the energy to celebrate after all the moving.
Being prepared is, for me, the most important tip I could give prospective home purchasers. A home, especially, is usually a very bespoke and emotional purchase. This is generally because, unlike cars, there are not a million of the same thing coming off the production line a year, that you can choose from. A home, for a buyer, has typically multiple checkboxes that need to be ticked. Then, more importantly, it has to appeal to the emotional side of the purchase, too, in terms of look and feel, etc. So generally, what tends to happen is that when you find the one you want because it is largely an emotional purchase, you really want it. Many a time, this is where logic is overpowered by emotion, and this is not the best position to be in. So when I say “be prepared,” this is the way I would approach it.
Find Out What You Can Afford
You would be surprised to know how many times I have new clients who I will meet for the first time. They are over the moon and at the same time so nervous as they have entered into a contract of sale on a property that is “the one.” Ten minutes later, the mood has taken a total about-face, because the property they were buying is nowhere near what they can afford. The clients have just lost their dream home, wasted the real estate agent and vendors time, and unnecessarily ridden an emotional rollercoaster they did not have to. Go and have a chat with a good mortgage broker, like Castle Mortgages, a mortgage broker in Adelaide. If it suits you better, let us come out to you after hours. Figuring out what home you can afford is the first step. Quite often, this may not be where you want to be for your purchase price, but a good broker will let you know what you need to do, to get to the value you are looking for.
Knowing what you can afford in your current circumstances will help shape your search with regards to a home, and help avoid silly mistakes as mentioned earlier. Next, I would recommend getting a pre-approval. Knowing what you can afford is one thing: getting approved is quite another. Especially if you are a first home buyer or have never had a mortgage. Going through the pre-approval process will often bring out any roadblocks that need to be overcome with regards to you getting financed. For example, you may have been late on a mobile phone account when you were a teenager, that is long forgotten about but now comes back to haunt you. If you were now under contract with two weeks to go to unconditional finance, this would probably mean losing the home you loved. Ironing out the kinks, while you have time and are not under pressure, means you can shop confidently when looking for your next home.
Leverage Off Experts
There is so much information out there nowadays, and much of it is on the internet. The trend now is for people to mine their own data. This is a good thing to an extent as it does educate you fairly quickly. As wonderful as the internet is, it can at times be conflicting, and there are many keyboard warriors out there, putting information out that confuses too. Ten years of experience cannot be gained in any shorter time than ten years. There is a wealth of free knowledge out in the market place, available from seasoned industry professionals. My advise would be to use it.
A conveyancer is also some on that you should probably pick early on in the game. If you have found yourself a reputable Mortgage Broker, they will often have a conveyancer they trust. The same would be said for a good real estate agent with regard to having a conveyancer. A good conveyancer will go through your contract of sale before you sign the contract and see if there is anything untoward in it. Hence to take the pressure off yourself you finding one while you are not under pressure would again be my advice.
If you are investing and have an accountant or good financial planner, having a chat about how you structure everything and if it is a good financial decision is also, in my, books a must. Asking around for a good home inspection company ahead of time will also save panic later. I always advise getting the property you are buying inspected to find any nasty surprises that might be lurking there. A good inspector will go as far as climbing into the roof cavities to check, wiring, plumbing, and building defects. It is a small investment that can save you thousands down the track.
I will Bang the Mortgage Broker drum one last time, we are finance experts who are accredited with many different lenders, so when it comes to knowing the ins and outs of finance, who better to have in your corner. Using industry experts will make you a much more confident and relaxed home buyer.
For me, if you have done all this work stated above at the front end, before entering into a contract of sale, your buying experience will a lot more of a positive one. Another benefit of this is you will probably save a lot more money as there will be a lot less hasty decisions.
Take Your Time Do Your Homework
You have your finance in place and have done all the upfront work. My advice now would be to look at many homes and spend a lot of time on realestate .com. What I find is that clients will start with a list of things that they really want on their home, the more they look around though the list will change. The reason being is that they realize that there are things that may be more important or less important to them, and that only was realized when they walked through many different properties.
Doing this will also give you a good idea of what prices are really like in the area, especially if you can find out what those recent properties sold for. Another advantage of doing this is that when the property you like comes up for sale and it is ” the one” you will know it is. Once you have found your property, take your time and have a good think as to what is the maximum that you will go to on that property. Stick to that number.
Buying your first home can be daunting, with the right help, it can be a good experience. Castle Mortgages are Mortgage Brokers based in Adelaide, serving Adelaide and surrounding areas. If you would like to start the conversation and get a little more info, get in touch with us today, the coffee machine is always on.
In saying all of this, please note this is a blog, and in no way does this constitute advice, everyone’s situation and circumstances are different. You should seek advice from the relevant professional in each field for your specific circumstances. With regards to structuring your finance, Castle Mortgages are excellent mortgage brokers based in Adelaide. As to the other stages of the process, we suggest you have a chat to an expert in each of these fields. Castle Mortgages has a few relationships with reputable experts in these fields that we would be happy to refer you to.