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Tips while buying property
Buying a property is a significant financial decision. Before you start to look for a property, it's important to understand the buying process.
Step 1:Decide what you want
Ø What area or suburb do you want to buy in?
Ø Do you want a house, terrace, semi, apartment unit or townhouse?
Ø How many bedrooms and bathrooms do you need?
Ø How much storage space do you need?
Ø Do you need car parking or a garage?
Ø Do you want a garden, courtyard or balcony?
Ø Do you need to be near public transport, schools, work?
Ø Do you have any special needs e.g. level access, room for a home office?
Ø Are you prepared to renovate if the property requires repairs or upgrading?
Ø What are you able to pay? Is this realistic considering what you want?
Step 2:Organize your finance
Make sure you have loan approval from your bank or lender before you make an offer. As loan rates vary, it's a good idea to shop around. Some people use a mortgage broker to find the best deal e.g. you can ask a representative of www.hamaracottage.com to assist you in getting a suitable home loan. You'll also need to think about other hidden costs such as renovation, repair costs, moving fees, insurance and adjustments to rates and levies on settlement.
Step 3:Research and take time to look for a suitable property
Be a smart consumer and do your research. Look at local and metropolitan newspapers as well as relevant websites. Set aside enough time to look at properties. Sometimes it helps to take a friend along with you. Take notes when you look at properties. It's easy to forget important details after looking at a number of properties.
Some things to look for when you inspect:
Ø Is the property in good condition?
Ø Is it located in a street and area that is suitable?
Ø Does it have the features you want? If not, list what isn't there.
Ø If you like a property, inspect it at different times.
Ø Is there enough storage space?
Ø What repairs are required?
Ø Is it in reasonable condition for the price asked and how does it compare to other
Properties?
Step 4:Organize your finance
Make sure qualified professionals conduct building, Pests, ownership inspections. You should remember that the cost of the inspections might seem a lot. However, they may find faults that could be expensive to fix. This could add to the overall cost of your property . Compared to the price paid, the inspections may be money well spent.
Step 5:Making an offer on the Property
When you find the property you want to buy, you need to make an offer of what you are prepared to pay. Negotiate if you think the price is too high. The agent will discuss this with the seller. You may be asked to pay an initial deposit.
Step 6:Exchange of Contracts/Agreements
Once ready, you are required to pay 20-30% of the property value to make agreement of sale.
Step 7:Settlement/Final Payment
Settlement occurs when the buyer pays the balance of the selling price. Adjustments are made for water and council rates, strata levies for units and any outstanding mortgages are paid out by the seller from the purchase price. The buyer becomes the legal owner of the property after settlement.
Things to keep in mind while selling your property
They say that the whole process of selling up, buying new and moving on is one of the most stressful series of events any of us goes through in a lifetime: and yet with careful planning, attention to detail and a clear focus, the whole process can be relatively stress free.
While there will always be factors outside the control of any home seller, those factors that fall within their control sphere can proceed fluidly and smoothly when they take the time to plan and think one step ahead.
1.Get free valuations and priceless advice.
Real estate agents will give you a home valuation for free because ultimately they hope you'll engage their services when it comes to selling your home. Therefore use the experience of a handful of local and trusted agents who are renowned for their selling success and invite them to come and value your home. Then, ask them their opinion on what if anything can be done to raise the value of your property to the maximum.
Real estate agents spend their entire professional lives examining properties, they know what attracts a buyer, what turns a buyer away and what can and should be done to a property to enable the seller to get maximum returns from his property - request advice based on the benefit of their experience. Most real estate agents will be happy to give you any tips they feel are applicable to your home because if you can increase the value of it, they can raise the price of it and if they are asked to represent you they will ultimately make more from the sale! It is a symbiotic process!
This whole first step will arm you with two priceless facts - firstly you will know how much money you can work with when budgeting and planning for your next home. Secondly you will have a fair idea of what action you should and can take to ensure you get the maximum price for your home thus allowing you to begin planning the work that needs to be done.
2.Speak to your current mortgage lender.
You need to contact your current mortgage lender and ask them what penalties and fees you will incur for early repayment. Inform them that you are intending to sell your home and they will give you an up to date statement of the amount remaining and exactly how much selling up is going to cost you in real terms.
3.Work out total selling, buying and moving costs.
To assist you with this step ask one of your valuation real estate agents to give you a break down of all the local fees, taxes and costs you will likely incur when selling and buying. These will most likely include the real estate agent's fees, a lawyer's fees, surveyor's costs, potential gain taxation and also consider factoring in the percentage of any annual taxes or charges on your home that you will have to pay.
Add to these expenses the costs you will incur when buying a new home and remember to include any deposit, mortgage arrangement fees, survey costs and insurances.
And last but not least, get a rough quotation for removal costs which are easy to gauge based on the size of your home and the distance you are likely to move.
4.Work out your budget.
By taking the original valuation sum given to you by the real estate agent and then deducting all of the totals from step 3 you will (hopefully) be left with a positive number! This is your clear profit, this is what you can then use towards your new home.
At this stage, if you have additional sums saved and you wish to add them to the above to increase your purchasing power you should do so. You will be left with an amount you can use as a down payment on your new home.
5.Get a loan agreed in theory.
Now you have to approach a mortgage lender and work with him to determine exactly how much you can comfortably afford to borrow. He will take into account many factors but these will include the amount you have as a down payment and the amount you earn. Ultimately he will arm you with a budget with which you can now work when searching for your new home.
6.Begin searching for your new house.
Now you have a budget to work with you can begin the exciting process of searching for a new home. It may seem dull to have to get all the financial facts and figures in place before heading off to find that dream house, but by doing all the ground work first you will be less likely to fall in love with an unsuitable, unaffordable home. You will not have set yourself up for a fall; you will once again have set yourself up for success.
7.Give your home a makeover!
Take the advice given to you by the real estate agents and get to work with the repairs, renovations and heavy work needed to bring your house up to the top of the market.
8.Find the best real estate agent.
Having already met and worked with real estate agents for the valuation of your home get back in touch with your preferred agent and ask them to revalue and then market your home. If you are in doubt about which agent to choose speak to any friends, family and colleagues in your local area who have recently bought, sold or rented property through an agent and ask for personal recommendations. You need to feel comfortable with the agent you choose to represent you, you need to make sure they will sell your house as quickly, efficiently, honestly and effectively as possible and that they are trust worthy to be left to show viewers around your home.
Once you choose your agent go through their entire marketing strategy for your home and make sure you are comfortable with their approach and that they are going to do everything required of them to assist you. Furthermore, ask them to revalue your home based on the work you have done to it and any market movements that have occurred in the interim.
9.Remember - first impressions count!
Now the time has come for buyers to begin viewing your home. You have to go over every single aspect of your home with a very critical eye and consider what the potential purchaser will make of every aspect. Their first impression of your home will be as they look at it from the sidewalk, ensure the outside of your home is as clean, tidy and well presented as possible and then walk through every room and the garden and look at it with fresh eyes. What will a buyer's eye be drawn to, the beautiful proportions of the room or the dirty window and vase of dead flowers?
Because first impressions count so very much take the time to consider every aspect of your home and then make time to clean, polish and present your home in the very best light possible.
10.Be as flexible as possible.
If you can be quick to react to a viewing request and flexible when it comes to a contract completion date you will be doing everything within your power to enable your buyer. By remaining on top of the upkeep of your home you should be able to say 'yes' to a viewing request at the drop of a hat. And if you remain on top of your home search and are at least mentally prepared to move out swiftly - even if this means moving into rental accommodation for a short period - you will be doing absolutely everything within your power for home selling success.
CHOOSING A REAL ESTATE AGENT
How to find an Agent ?
Ø Ask people you know to recommend agents that they have been happy with.
Ø Local newspapers are often a good source of contact information.
Ø Look at how agents advertise their services and how they advertise the
properties they are selling or renting.
What to look for in an Agent ?
Ø Have experience in the service you want such as sales, auction property management, strata, rural property, valuation and business agents etc.
Ø Provide details of the fees they charge and the services they would offer you.
Ø Outline their recommendations about your property.
Ø Have a good success rate.
Ø Are clear communicators who are willing to answer your questions and give you information about what you need to know?
Ø When you are selling a property, it would be a good idea to attend open house inspections and see how the agents deal with prospective customers.
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