Considering buying, but have no clue where to start.

DH and I have been talking about really putting our heads down and saving for a deposit for a house. We had building plans which we wouldn't have needed a deposit, but it doesn't look like it will be going ahead :( So I have done a budget and saving enough for a house deposit just may be possible for us. I looked on realestate dot com and we are only looking to buy something older and the average in our area is about $270K - $290K. And theres a little app on the bottom of the screen that calculates what your mortgage repayments are going to be which was about $1800 a month, it's doable.
So I calculated that if we manage to save $400 a week we will have around $19K after 12 months. I know it probably won't happen like that, but this is all hypothetical :lol:

But, I have no clue about this stuff. What does NEG mean on all the prices? I'm assuming negotiable? What does that mean exactly?
And also 'BUYERS OVER $270,00" What does that mean exactly? That they will only take offers higher than that? How high will they go? Does that mean it will be an auction?

Someone please help, I'm clueless :lol:

Firstly how exciting!!! The more you can save for a deposit the better off you will be!

So a few things, firstly calculate the interest rate going up at least 2-3% (will never forget my parents talking about 18% interest rates in the 80's) and see if you can still afford repayments. They might be steady and sometimes dropping a 1/4% right now but they can also go up and up and up and you want to be sure you won't lose your house if they do.

Secondly neg is negotiable as to how far it really varies on the area you are looking at but usually you could expect to offer around 10k under but also over actually!! Depends on how competitive the market for that house is. Also if they say buyers over 270 it would indicate to me around 5% over, so I would be expecting to pay 280ish? but again it really depends on the market. Unless it's listed as an auction it will be a private sale.

For private sales what the will do is call for anyone who is interested in a property to put in an offer by a certain time, and then present to the seller. If there is only you and the seller there is room to negotiate if they reject your offer, or if they reject all offers presented but usually the agent will get all buyers to put in their best price to get it all over with!!

At the moment the Melbourne market is pretty flat in some areas but others are booming so it really depends(I'm not much help really am I!!) When properties are listed at 270+ for e.g. you can calculate around 10% above that for what you would think the seller is wanting. It's the worlds stupidest system. Agents are not allowed to list properties more than 10-15% above or below what they think it will sell for so that is usually a good starting point.

Some agents simply list a price, if nobody else is interested in the same property then you could get it for that listed price(we did a few years ago) but if you are competing you have to probably put in an offer a bit higher.

It's worth speaking to a few agents about how it all works, going to see a few places IRL and chatting to the agents and asking them - What price does the seller WANT and see what they say, they do hedge a bit but you can sometimes get a better indication of price that way. Also look at a lot of houses, and I mean lots. We saw probably 10 houses a weekend for a few months before we bought this house - it's a long sometimes frustrating process but then again it's very rewarding!!!

Good luck!!!

Thanks Tanstar! We are still ttc so I have to factor in the possibility of losing a wage whilst we are saving. But I'm not going to fall PG any time soon I reckon so we should be ok for a while. I didn't consider the interest rates either, it's all going to come down to what the maximum weekly repayments are going to be. I'm scared and we haven't even started saving yet!! :lol:
So I could expect that the sale prices could be anything up to $15K over or under the asking price, roughly?

Also, do the banks really want 20%? Cos that will take is 3 years to save!

Just wanted to add don't forget mortgage insurance and stamp duty costs.

Go to one of the bank's websites and check out how much your stamp duty is going to be. It can be a large amount, depending on your state. Of course, Victoria has the highest stamp duty :(

Add about $800-$1000 for legal/conveyancing costs. Plus your bank costs.

Check out whether you are entitled to any state/federal government grants too.

Thanks N2L, I just read something that said allow about 10-15% if I remember correctly.

So if I bought a house at say $280K would I expect to be borrowing around $300K???

And thanks Divvy, I will check it out. Going into the bank today so I will ask :)

Some will do 90 or 95% loans so you only need 5 or 10% deposits. Just depends on the bank/credit union.

You wouldn't be able to borrow more than the house was worth but you'd need another $20-25k on top of house price of $280,000. So you'd need to save about $40-50k.

$50K? I guess it's back to the drawing board then :(

Just start saving. You may as well. You have to start somewhere and you'll get there in the end!

The property market sucks :(

I guess I have to choose between having a family or having a home :(
If I have kids I won't be able to work full time. And we don't earn enough to rent and save enough on one wage.

Everyone I know are in their own houses. And nice houses too. The only difference is they all got deposits from their parents!! And their cars too!!!!!! :(

Are you a first home purchaser? If so check to see what grants are available in your state. Im in N S W and we have exemptions for stamp duty and the like.

Also you will only need mortgage insurance if you borrow more than 80% of the value of the house.

You will need home and contents insurance and this can be paid monthly depending who you are insured with. Im with Allianz and have an amount deducted from my account.

Not sure what searches are required in Vic but I would allow about $1500 to $2000 for legals and pest & building & survey costs.

Your bank may also require a valuation which could be anywhere from $300 - $500.

I think you should go in and see your bank. They will advise you on what grants you qualify for and how much you can borrow. Then go from there.

Good luck!!!


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The best way of predicting what a sale price is going to be is to have a look at what other similar properties have sold for - not their asking price.

You can get sales reports for about $10 from memory, then you google the addresses and have a look at the pics.

A property is only worth what someone is prepared to pay so the asking price in a flat market is not always an accurate guide as to what it will sell for.

Different areas also have VASTLY different markets. We sold in inner Melbourne for $150K more than advertised selling range and about $70K higher than our reserve. We bought at the same time in the country for about $5K less than advertised fixed price. It wasn't a negotiable price but we negotiated as I'd noticed from the sales reports that houses here generally went for below what they were advertised for. Friends also bought houses here and paid the advertised price - they were astonished when I told them that I negotiated, they didn't think they could. You can. It might not work and you risk missing out on a place if there's another buyer but you take a calculated risk.

Do lots and lots of research on what houses sell for in the areas you're interested in.

I just read your last post. Dont get disheartened. Get all your info and go from there.

Make a plan, it may take you a little longer but with careful planning and budgeting you will get there:)


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Thanks ladies.

We had put off buying when we were younger because we knew there was no way we could save that kind of money. Now it seems we still can't :(

I guess we will save anyway. It's not like we haven't been trying, it's just things are so damn expensive. Especially LTTC. May have to make some massive decisions......

I think your first point of call is to talk to a broker. They will tell you what your borrowing power is based on your incomes. FWIW, our mortgage was $290K and we're paying $2100 per month. But we have a fixed interest rate, and we fixed it five years ago, so with all the drops, we've remained higher. The upside is that we can budget exactly what we need to pay, but the downside is that our interest rate remains what it was years ago.

Our house is currently on the market. When it was appraised, we were told it was worth $380-$400K in our area, based on current market trends. We'd been watching the local market for a while and knew this to be the case. We're in a growth suburb and to build now alone will set you back around $360K. We agreed that our reserve for private sale was what the agent told us the house was worth, but it's been listed as $350-$385K. That in itself has driven us mad because it's well below what we'll settle for, but it doesn't make it easy for a buyer to figure out how much we want. Yesterday we got our first offer for $330K. Well below what we want, well below what you can buy ANYTHING for here, but to the buyer, it's within reasonable range of the listed price. The agent rejected that price, so they increased it, and again, was well below what we can settle for and when we rejected that, well the response was somewhat nasty.

The best way to judge what people are going to actually want for their house is to research the market thoroughly. Walk through some houses that are what you're looking for (ie 3 bed, 2 bath) and see what they sell for. An unfinished house sold in our same street for $367K - no driveway, no backyard, no front yard, no flyscreens, basic inside. Another basic house on a smaller block in our street went for $355K. If the people had who had made an offer had researched this, they would have known that the $330K offer they made on our completed house with a stack of extras was well below the mark and it would have avoided their own disappointment.

The other factors to consider whether someone will accept a lower offer or not is whether they NEED to sell. Have they bought another house that's relying on the sale of their own? Are they in a hurry to sell. In our case, we're not in a hurry. We haven't bought another house and aren't looking. We can hold out for the price we need to get.

Hope all of that helps. Good luck!

I recommend reading Barefoot Investor do help you learn to save. Tackle the problem in front of you. Save now. If you get pregnant, then you can evaluate your choices then. If you don't, then you buy a house or blow it all on a round the world trip. Things may also change in the job market. You could both get a second job in the meantime, reduce costs...there are options. What other people do is their business. We rented for years before buying.

The bigger your deposit and that you have genuine savings, the more likely you are to get a loan. Use compound interest to your advantage. Save the money into a high interest Internet account you can't touch. If it's going to take you 4 years to save, then take advantage of the first home buyer savings account. The government tops it up. You can only use the money for a deposit though.

Prices may go up or down in that time. So imagine you are buying a house for $300k. You want at least $30k for the deposit. You also need to pay stamp duty, say $10-5k, bank fees, transfer fees. We recently spent $2500 for a brilliant property lawyer who's advice saved us money on the house. As you're borrowing less than 20%, you need to pay mortgage insurance. This is not actually an insurance, it's a fee to the bank to cover them on the risk you can't pay the mortgage. It may be the bank will add some of the fees to the mortgage rather than take them as cash (which you'll pay interest on so try to avoid that if you can). So all up you may be borrowing $285k against a $300k house. so work out the repayments on that, assuming an interst rate of about 10%.

If the first home buyers grant is still in when you buy, you may get something back for it. Currently it's $7k for an established house. If you buy a new build, you get $20k. We bought an almost finished new build without having to deal with long repayments on a house and land package. Whilst we had to pay more stamp duty, that was offset by the $20k. After various fees, we netted $900.

My maths isn't accurate, but you could probably access a $300k house if you save $40-50k. That's about $150-200 per week for the next 5 years, not taking into account interest earned. After tax, could a second job net you that? You could have it paid straight to your savings account. Even $50-100 a week would make a difference.

If that still seems daunting, look further out or consider buying a small house or apartment.

Thank you for all your advice ladies :)
LionsandBears, we are hoping to put more in and save quicker so we can take advantage of the reasonable prices at the moment. Weather or not they are still good in 18 months time is anybody's guess though.

And we can't get the first home buyers because DH bought a house for $40K about 15 years ago :( He separated from his ex and sold it after only 2 years and made no profit. It sucks that because of this we can't get it.

I saw the bank this morning and they were great. They worked out an estimate for me for a $280K house. We will need (worst case scenario-her words):
$34K deposit, which can be saved over 18 months at $435 a week (tight, but should be doable for us)
And our mortgage repayment will only be $378 per week. That sounds totally doable for us :)

Sounds easy, but I know it will be much harder than that. Especially if I manage to fall pregnant. DH is prepared to work weekends whenever he can to get extra $ too.

That sounds great Tash! go for it!!

Don't forget the extras though.

I really hope your dreams become reality soon :)

Thanks N2L, the extras included were all the bank fees and all the government fees. We will just keep saving and saving and having no life in the process :lol:

I hear you sister! My money goes straight to ivf :lol:

Oh N2L :( It's so crap that IVF is so expensive. I would have definitely started it if it wasn't. But I shouldn't speak too soon, I may still need it.....

It will be worth all the effort in the end. Hopefully you will get the house and the baby xxx

you might have to sacrifice location, and get something smaller than you'd like (we're in a 3 BdR unit in Hampton Park - would sell for about 330 - 350K now...) - but in the end, having your own home is a nice feeling .

good luck!! xxx

I don't have much to add, but you can also check out the 'On the house' website for sale prices of similar houses in areas you are looking.

Thanks myturn, our suburb is growing, but it is still cheap because there are still old parts. We will only buy something older anyway because we need a big backyard!! :lol:

Indadhanu, I will check it out :)

Would your DH consider having the house in your name only but the loan in joint names - that way you might be able to qualify for the first home owners grant?? Just a thought

Sounds like a great idea, but I don't think it works like that :( from what I've heard you can't get a house loan in two names and then buy the house in one name.

Unless anyone else can shed some light on this?

I don't think you can or we would have done that (this is DP's first house in Australia).

You will find a broker is worth talking to as they don't work for a bank but work for the customer.
Also you may be surprised how much you will need for a deposit compaired to what a bank says.

I agree with what the others have said about looking. Also have a yes and no list of what you want in a house.

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I don't think you can or we would have done that (this is DP's first house in Australia).

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Yeah, I don't think you can :(




So who can I go to for the loan for a house? Obviously the bank, but who else? Is that like Aussie home loans etc.? And what exactly does a broker do?
The bank were pretty reasonable, but I'd love to know all my options......

If you go through a broker he deals with all lenders and finds the one that will suit you.

Another thing to be careful about is don't apply to to many banks as they keep a record of applications.

Thanks Rivlas, it's the same for personal loans and credit cards too with the credit thing.
So a broker you pay and he deals with banks/financial institutions for you?

You don't generally pay the broker - he gets a commission from the bank. Some are independent of banks, some are associated (I think). They should have to declare that in their paperwork.

Brokers are useful as they can explain all the jargon. There's so many different types of loans available and it's confusing. In your situation, you might want to have a look at a loan that lets you make extra repayments and gives you a redraw facility. So while you're on two incomes, you could pump extra money into your mortgage and if you go down to one income, you could withdraw the extra repayments and use that cash to keep up with your normal repayments until you go back to work.

I'm not sure what the banks' policies are now but a few years ago (pre-GFC), they would lend you stupid amounts of money. They offered to lend DP and I, five times our income. That was crazy - we would not have been able to make the repayments despite what they said. The old rule of thumb (which I still use) is to only borrow up to three times your gross income eg. say your joint income is $100K, then don't borrow more than $300K.

So, take what dollar figure they give you with a pinch of salt. You'll have a good idea of what repayments you can comfortably make once you actually start saving for your deposit.