Buying a first home...hints and tips

[Floweryfields]

Can i ask a question too? If you are buying a rental property - and using the equity on your existing home - do you have to have a deposit?

[Astrid]

smiles4u - good stuff on finding out who your neighbours will be. We also had a similar experience when we were renting, it got quite scary and finally ended when they burnt the unit. We did have a good experience though when we bought, both sides of the house were commission, but long termers. the only issue we had was getting the fences repaired, the Dept will not replace unless completely falling over. So if the fences are bad, be prepared for a long wait and many letters.

[Phteven]

We bought at auction and we paid a great price. We were familiar with the market and we knew exactly how much we were prepared to pay.
We didn't bother going ourselves, we were going on holidays so we sent FIL with inscructions about how much he could bid up to and he got it for a little less than our limit. There can be a lot of emotion in auctions and they're no place for someone who can't control thier competitive instincts but if you can walk away from it (or send someone else) then you might pick up a place for a great price.

Start sussing out the market now - set up an alert with the realestate site and look the weekend papers, drop in on the open homes (DH and I still slow down when we see one), go to a few auctions, get to know the agents and so on.

If you start a shortlist early you might be able to identify a house that has been on the market for a while and hasn't sold. If the vendor is getting desperate they might drop the price big time. If a property falls through at auction hit them up with an offer the next week.

[Rowellen]

Some of our do's & don'ts (this is just my experience having been through the process a few times):
Do NOT go unconditional on a contract unless all conditions especially finance are approved. Finance should be approved in writing. I recommend asking for at least a three week finance clause. Agents will try to talk you out of this. We went unconditional on a contract on verbal confirmation and the following monday, they said - no sorry, the person who said that wasn't authorised . We did get a loan through a different bank but it was a very stressful experience. If the owners won't extend the deadline, let it pass. There will be other properties.
Get a building & pest inspection. And read it. If you can be there with them, even better.
Don't get emotionally attached - it is just a house.
There is a website that shows you how much the house was last sold for. This can be great for setting a price that results in a win/win - they make money & you don't pay too much. The longer it's been since the last sale, the more likely it is that this will happen.
Do know the area, and research sale prices. Most agents will tell you the sale price once a contract is unconditional. After all it is publicly available information once RPdata get around to publishing it.

If you are considering a house that is up for auction, my tips would be:
Get an independent valuation. Yes it costs a few hundred $$ but could save you thousands.
Get finance approved before you even think about bidding.
Set your limit and stick to it. Don't set the limit by what the bank will lend you but by what the house is worth.
Ask someone else to bid for you if you think you might be nervous. Make sure they know your limit. I overheard a couple bidding at an auction once for their daughter. They went over her limit but luckily for her they said they would pay the extra (about $8K). I wonder if they considered the extra stamp duty.
You can make an offer for a house that gets passed in at auction. Offer them less than the highest bid - make them realise how greedy they were


Ausgirl - you generally won't need a deposit if you have at least 20% equity. Note that the equity needs to be 20% of both properties. Of course it will vary from bank to bank. Some banks will allow you to have less if you pay mortgage insurance. You will probably have to cover your own costs and stamp duty is significantly higher on investment properties. A good broker will be able to help you.

HTH

[smiles4u]

smiles4u - good stuff on finding out who your neighbours will be. We also had a similar experience when we were renting, it got quite scary and finally ended when they burnt the unit. We did have a good experience though when we bought, both sides of the house were commission, but long termers. the only issue we had was getting the fences repaired, the Dept will not replace unless completely falling over. So if the fences are bad, be prepared for a long wait and many letters.

So glad you worked that out ... and so glad you worked it out i didn't mean all tenants in commission housing as i have had friends live in housing and they treated it as if it were their own home & kept them beautiful ... yeh, it's the tenants with drug &/or alcohol abuse or seriously mental probs i couldn't live within the same street of ... too hard to know if tenants have probs so better just to keep clear all together & not take the chance as could be harder to resell the house.