First Home Buyer FAQ's
If you are looking to buy your first home, you may be experiencing all kinds of emotions from joy and excitement to fear and anxiety, after all, taking the plunge into the property market is most likely going to be a life-changing commitment and a large financial outlay with potentially huge rewards. Buying your first home is a momentous occasion, but if you aren’t sure where to start, don’t know what’s involved and not sure who to turn to - PRD Real Estate understands how you feel and we are here to help. With hundreds of properties for sale throughout Mildura, we have the experience and expertise to help you secure the right property for you. We have compiled list of FAQ’s which may help to make you a little more confident and a little less overwhelmed about purchasing your first home.
What Costs Are Involved When Buying a Property?
The deposit for the purchase price of the property is the main cost you will have to come up with, however, there are many other expenses involved with process and it is important you have enough funds pay for them all. Most first home buyers are recommended to save a minimum 10% deposit so if you are looking to buy a house for $600,000 you should have at least $60,000 saved. Some of the additional costs may include:
· Stamp duty
· Mortgage registration fees
· Transfer fee
· Home loan application fees
· Conveyancing/legal fees
· Lenders mortgage insurance
· Property valuation
· Building inspection report
· Pest inspection report
· Strata searches
· Home and contents insurance
· Rates and council fees
· Utilities
· Moving expenses
What Is Stamp Duty?
Stamp duty is a charge which is applied by state governments in Australia on transactions relating to the sale or transfer of land or property. In most cases, stamp duty has been abolished or reduced for first home buyers.
What Is the First Home Buyer’s Grant?
The first home owner grant (FHOG) is a one-off payment designed to encourage and assist home ownership amongst Australians. The FHOG differs in each state and territory and in many cases applies to new homes only. To see if you are eligible contact the revenue office in your state or territory.
What Are the Different Ways to Buy a Property?
Private Treaty - also known as a private sale, this method requires the vendor/seller to set a price from the start of their campaign. Prospective buyers can submit offers through the real estate agent to the owner and potentially negotiate the price. Once the offer has been accepted by the owner, there is a cooling off period (where certain conditions must be met in order for the sale to go through, such as obtaining finance or a sound home inspection).
Auction – conducted by an auctioneer on a given date and time, an auction is a gathering of buyers who publically place bids for a property. When buying at auction it is important that you understand the process. For more information, view our PRD Real Estate Buying Guide.
Expressions of Interest - similar to private treaty, however you must send an expression of interest document with your written offer by a specific date. The property price is not always advertised.
Tender – usually associated with premium properties for sale in Canberra, buyers must submit a formal written proposal as a response to the seller’s tender price. Buyers compete against one another by submitting offers, however the offers are not made public so in essence, this process is similar to a silent auction.
What is Loan Pre-Approval and for How Long Will It Stay Valid?
Home loan pre-approval means that a lender has agreed to lend you an amount of money towards the purchase of your new home but it is subject to final approval. It takes into consideration your income, expenses and liabilities amongst other things, and allows you to know the maximum amount you can spend on a property. This can help you to negotiate with more certainty and bid with confidence. Depending of the lender, pre-approval can be obtained within a few business days and most pre-approvals remain valid for 90 days.
What Inspections Should I Arrange?
There are a few inspections that can be carried out prior to committing to a property purchase. These may help to give you peace of mind by identifying any potential problems with the property before you sign the contract. These inspections will be at your own expense, but it is well worth spending a little now to potentially save yourself from making a very expensive mistake. Depending on the property you're buying, you may need the below:
Building inspection – this examines the condition of the building and site of a house and identifies any areas of damage or areas that could become a problem in the future.
Pest inspection – this is a visual inspecting the building for any signs of termite damage or activity. The interior and exterior of the home, as well as the underfloor space and roof cavity will be examined.
Strata Inspection – if purchasing a flat, unit or apartment, this inspection examines the physical condition of the dwelling itself, as well as the strata agreement and attributes of the building.
Buying a property for the first time doesn’t have to be stressful, with the right advice it’s actually a lot easier than you may think to secure your first home. To browse our list of properties or for expert advice on buying a house for the first time, get in touch with PRD Mildura today on (03) 5022 7750, send us an enquiry online or check out our listings on our website now.
