Buyer Handbook Buy Your Dream Home

Buyer Guides : How to find a house or land for sale by owner?

There are tangible benefits to buying a home in Australia. If you are renting at the moment you can look forward to greater privacy and independence. By buying smart you could make the largest and most successful investment of your life. Moreover, certain things you might like to do to your first home, such as landscaping or painting, will usually add to its value.

If you are already a home owner and want to upgrade to a larger home this is also a good opportunity. You will be able to avoid the common mistake of overcapitalising on your first home. If you need an extra bedroom or would like a swimming pool it is usually more cost effective to get these features in a second home. The building expense is rarely covered by an increased sale price.

The kitchen is often the most important room in the house. After all it is the place you will be spending the most task related time. Make sure it is spacious easy to clean and easy to “navigate.” This kitchen has both good natural lighting and sufficient but soft overhead lighting. You want to be able to see the task at hand.

So having made the decision to buy a home, a wise course is to look at for sale by owner homes in addition to those listed by agents. If you are only going through an agent you will only be shown those houses they have access to, especially so with sole agent homes. To get the best home you should make a point to see every suitable home in the marketplace. Furthermore, a house sold by owner in Australia will be likely to share the savings from not having to pay real estate commission. The commission is usually factored into in deciding what people need to get from the sale.

Basis of the perfect home

A good way to start the home buying adventure is with a list. Write down answers to these questions (spouses should do lists individually):

  • What are my five favourite homes I have seen?
  • What 2 features of these homes did I like the most?
  • What are my five favourite residential localities?
  • What 2 features are important in making each of these localities good places to live?

When answering the questions, don’t restrict answers to homes or areas which you think are practical or financially possible for you to live in. You are simply trying to assemble a list of what the ‘perfect’ home should contain.

From this ideal list try to find at least ten points which to you are vital, general attributes to either houses or areas. At this stage make this a communal list, involving children if they want to. Expect an animated discussion. It is common in the house buying process for different members of the family to be surprised at what things are important to other members. The object of this exercise is to end up with a document that you shouldn’t lose sight of in the sometimes gruelling process to follow.

From talking to lending institutions to the final negotiation on price it is important not to forget exactly why you wanted a new home in the first instance, keep in mind that as you go through the process of searching your ideas of what you want from a home are likely to be modified.

Locality Basics

There are two aspects to the "where" of buying a home. One is the statistics, local gossip and known facts of what a place is like: the other how it feels to you.

Most people have some notion of an area they would like to live. To test this notion, you should go back to your list of desirable locality features. Try and list features of areas you are considering living in, both good and bad, and compare them to your desirable features list. These two lists could become the basis of a good family discussion.
Visit these potential neighborhoods and use them as you would if you lived there. Walk the local parks, shop the corner stores. What is the neighborhood atmosphere? How does it fit you? Drive from your workplace to each potential neighborhood, timing how long this takes. If it is a consideration, visit schools and ask around about their reputation. Considerable reading is needed to get to the hard facts of neighborhoods.

buy my place

The area you would like to live in is closely related to the type of house that you would like to live in. This charming open verandah is suited to a quiet leafy suburb, not a noisy inner city address surrounded by apartments and with perhaps a higher crime risk.

A good place to start is with real estate publications. Look for periodicals which deal in local residential investment advice, and consider subscribing to them. Thoroughly read the residential property sections of newspapers. Look at reams of advertisements, noting particularly house prices and how they relate to different areas.

The big picture is to look at what area is going to be hot in the future, and avoid those areas where house prices have peaked. This is the single most pragmatic consideration in which house you should buy.

Financing Basics

It is a good idea to talk to lending institutions before you start looking at specific homes. Firstly you can search with confidence knowing your price range, and secondly you will have greater bargaining power. In putting in an offer on a house, to have a pre-approved mortgage is a definite negotiation asset.

The basics of a home loan are a good credit rating, stable income and sufficient cash for a deposit.

Your credit rating tells the bank how financially responsible you are. If you have had credit problems in the past, draft an explanation letter sticking to the facts that show the problems were localised in time. Show that the problem was due (for example) to a divorce or an illness you have recovered from. If you have never been for a loan and thus have no credit history, list the various bills you have paid, especially large items such as insurance or education payments.

It is important to lending institutions that you can consistently meet your mortgage repayments. This means that they will be looking at how long you have held your current job. So for a self employed person they will average income over two or more years, but may be happy with the gross monthly salary of a wage earner.

Be aware of the (cash) deposit you will need for your home, as well as government charges on your loan. If after consulting with various lenders you don’t have enough money to go with any of them, start saving. “Pain money” is the best way to get your deposit. Forgo any luxuries and non-core expenses for a few months and you will soon be in the market for a loan. Otherwise sell that boat you only use four times a year and hold a monster garage sale.

Don’t lose hope through this search for a home loan. This is one of the most difficult steps for everybody.

Searching Basics

Use an at least ten rule. Don’t consider buying until you have seen at least ten properties. Many people dislike the home buying process so much that they buy the third house that they see. This leaves you open to ‘the poor buy’. Some unscrupulous agents show people several poor value houses in an area, before showing them an okay value house, giving them an inflated emotion to its true worth. So stick to the principle that you will look at ten properties before you consider a move.

Don’t however move too slowly. You should aim to efficiently gain an idea of the current market price of houses which fit your criteria. When you look at various houses imagine the property empty. When all that furniture goes the place will look bigger.

It is important to disregard that one charming but peripheral feature (tacked on fretwork, colourful bed of flowers). You are aiming to buy a good all round property, so look at the total living environment.

buy my home

Draw a rough plan of the various houses that interest you. Note the direction the building faces and its position on the block. On your plan draw line house plans of flow. Does the kitchen have to be walked through to get to the lounge. You want to get a pictorial idea of how well designed the building is.
When considering a particular house remember that all promises and price discussions should not be done during the first or even the fourth inspection. If it’s not on paper, it’s not legally enforceable.

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