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  • AADD Moderators: swilow | Vagabond696

Buying a House - Tips?

^ I got it from my ex bf. However I re-ordered it from dymocks, so any book store should have it.

I Highly recommend reading it before doing anything.

:)
 
1. When settling you will need to go through a settlement agent off some sort, in my experience the real estate agent you buy the house off will offer you their services which is way over inflated...so to save a few hundred bucks see if the bank that approves your loan also acts as your settlement agent..

2. If you are buying a strata unit, check how much the strata fees are per quarter, as well as any exisiting debts owed, insurance for the strata property, which part off the unit is actually yours.

3. You can also go to DOLA and get a big map printout (grid) off the existing street it will contain all the details off land info, prices paid since last sale for the year for each block, land sizes etc, cost ya aBT 11$, you can proby get this info online now too

thats all from me !
 
The Home Ownership thread... advice? tips?

I'm not sure how many bluelighters here are up to this stage of their lives but I know there's a few about. I know I also started a mortgage thread ages ago, but I couldn't find it so I thought time for a new one. :)

Those who have had any experience with buying or building a home, could you post your experiences here so those amongst us considering it can learn from your great wisdom?

Of particular interest to me is:

* buying vs. renting - your thoughts? advantageous or no?
* what are the pitfalls to be aware of: extra costs etc. Home ownership vs. renting.
* To buy or to BUILD?
* Which mortgage lender, and what are the finance options if you have no deposit whatsoever.
* The first home owners' grant - how does this get paid and at what stage of the process? ie. can it be used for the deposit?
* Any other hints and tips you have based on your experiences.

I've spoken to Mortgage Choice and gotten a rough idea of what we could borrow and our lending options, and talked to Simonds Homes about the building option and gone to see a couple of houses. So we are starting, I guess you could say, to gather info. I'm just interested in any first-hand experiences as well.
 
I've just bought my own apartment as a first homebuyer so most of this is still fresh in my mind. Also my parents had their home built in Far North Queensland.

In terms of renting vs buying; I think people often underestimate the value in renting. People these days are so hung up on the idea of owning their own place, you need to figure out what's right for your own circumstances and budget it out over the long term.

With the money you save from not paying a mortgage; what else would you do with the money and how much more money could that make you?

Building a house is a pretty big task and you really need to be on top of things. I know my parents had a fair few hassles dealing with all manner of different tradespeople and costs blowing out, etc etc. Definitely need to do your research if you plan to build.

The first home owners grant is typically paid at settlement. You can't really use it for the deposit, the FHG is taken out of the total cost of your purchase but I don't think it can act in place of a deposit.

For example I paid a deposit of $13,000, the FHG on top of that was $10,000 so it took $23,000 off my purchase price (purchase price + stamp duty & government fees)... what was left over was the amount I needed mortgaged.

Regarding finance. I don't know about this no-deposit stuff... I mean you've said in another thread Mortgage Choice are prepared to loan you up to $600,000 but this sort of thing doesn't always take into account your ability to make repayments. It does indicate though that you guys are doing pretty well.

With no deposit, be prepared to pay a hefty sum up front for LMI (Lenders Mortgage Insurance). I guess if you are confident that you can meet repayments, now and well into the next thirty years, a no-deposit loan shouldn't be a problem.

Check out Consumer Affairs Victoria, they have some good information and some booklets they can send out for free, I think they're only downloads now. I found the "Real Estate: A guide for buyers and sellers" really useful.

CVA: Buying & Selling Property
 
Okay SLM, well heres my tips. My dads a real estate agent and ive worked with him for about 7 years, so heres what ive sort of picked up along the way.

* buying vs. renting - your thoughts? advantageous or no?
Renting. Waste of time, waste of money unless you are a person who is constantly moving around or are living in a share house. by renting you are paying money off someone elses morgage. For that extra $400-$500 a month you could be on your way to owning a home, and in the end if you buy smart you will most likely always make money on the house you buy when you come to sell it.


* what are the pitfalls to be aware of: extra costs etc. Home ownership vs. renting.
The pitfall obviously will home ownership is stamp duty, but if you get the first home buyers grant that basically covers it. Also stuff like you have to pay a conveyancor or a solicitor to do all the contracts for you, you dont have a choice, you have to have a solicitor. Stuff also like people taking dishwashers, blinds, fixtures and fittings. You may have to buy stuff like this when you thought it was included in the price of the property.
Renting basically pitfalls is - you can be kicked out at any time, its someone else house and you cant do anything you want to it without asking for permission first, you are paying someone else morgage.

* To buy or to BUILD?
Unless you know a builder or can get an awesome deal on a great piece of land out in the yarra valley.. building - NOT WORTH IT. If you are looking around someone you are now (like say SE suburbs) a piece of land will cost you nearly as much as a decent brand new townhouse. Then you have to get 3 separate permits to build. These can cost up to $2000 each. Then you have time constraints, overtime etc etc. And what a headache buildinjg would be (imo)

* Which mortgage lender, and what are the finance options if you have no deposit whatsoever?
I strongly suggest you definately get some sort of deposit saved before you start approaching lenders. A lot of lenders are assholes if you explain you dont have a deposit. I went with the NAB for my home loan with a variable rate, but they are pretty shit, we have been overcharged about $3000 in fees before we got an apology letter from them realising their mistake. I think bendigo bank does pretty good rates and deals. but definately use as much of your own money as you can, and look at what you can realistically afford so you arent stuck in a morgage rut forever.

* The first home owners' grant - how does this get paid and at what stage of the process? ie. can it be used for the deposit?
Usually it is given AFTER or at SETTLEMENT. At last check it was $14,000 but they keep changing it, and with new parties coming to Victorian government it could all totally change.
http://www.sro.vic.gov.au/sro/SROWebSite.nsf/index1.htm
This website can be helpful about hidden charges and stuff.
Basically the first home buyers grant will cover your stamp duty, so it is just a way for the government to pay themselves. Usually you cant use this for deposit, but as i said, they keep fucking with the rules and stuff so who knows.

* Any other hints and tips you have based on your experiences.
Look for a house which you can realistically afford.
Dont overlook a house based on appearances. If you see gross carpet and bad blinds, think of what an extra few thousand will do (polished floors and timber blinds) and that will add value to your house when you come to sell.
Possibly look for a house with a reasonable sized backyard so when the time comes to sell, you have to option to sub-divide and make about $100,000.
Never ever offer what the vendor is asking. Always offer at least $10,000 less. real estate agents usually advertise $20k or more above what the vendor wants. Dont wait for the open for inspections. if you like a house call up and make a time ASAP. If it is an awesome house by the time the inspections rolls around it might not be there anymore.

also look at realestate.com.au
and domain.com.au

as well as local newspapers, the real estate weekly magazine (outside real estate agents) for houses :)
HAPPY HOUSE HUNTING!!!
 
Thanks guys: you're awesome. Great advice also in the earlier thread, nice merge Kat.

Hoptis: so building = headaches? Is that the sum of it? I know my sister built and Dale's parents recently built and we did certainly hear lots of moans and groans about surprise costs and late tradesmen, and things ordered/installed wrongly etc. That's one of the reasons I wanted to buy outright - I really can't be fucked with all that.

Then I started looking on the building company's websites and they make it seem so affordable and attractive I started 2nd guessing myself.

KKE: I don't think it's going to be possible for us to get up any decent sort of deposit in the amount of time we have.

Here's the situ. I want a baby. Dale wants a house first. I lost that particular argument ;). I'm 32 soon. We need house before baby. House + 1-2 years to settle in = 34 year old me starting a family. House + saving deposit + 2 years settling in = 36/37 starting a family? A little too late for my liking. I know it's better in the long run not to borrow 100% but I don't have a huge deal of time up my sleeve to muck around. We saved $9,000 in a year for the wedding; we'd need twice that for a decent deposit, that's 2 years more wasted in child-free land as far as I'm concerned :). Geez don't I wish we'd started thinking about all this earlier!! Grrrr.

(ps. you'd be surprised how common 100% is these days... they just slap a fat lot of extra costs on it, but I'm willing to wear that.)

Great tip about offering less than is advertised... I would have just offered exactly that amount; if it said $270,000 in the paper I'd have offered that.

Thanks for the links and the advice - def something to chew over!
 
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hoptis said:
Regarding finance. I don't know about this no-deposit stuff... I mean you've said in another thread Mortgage Choice are prepared to loan you up to $600,000 but this sort of thing doesn't always take into account your ability to make repayments. It does indicate though that you guys are doing pretty well.
Click to expand...

There's no way on god's green earth we'd borrow $600k :D It was just interesting to know we could. I'm thinking around $250-$300k. At $300k our repayments would be about $2000 a month - still more than twice what we're currently paying in rent, but do-able.

May have to look way further out like Narree Warren or Berwick for something nice for that.
 
If you are willing to wear the extra costs then do it!
It probably the money you will save in renting whilst you are saving anyway :)
Buying a house is the most funnest and most stressful thing you will ever do :)
 
kryalkastleE said:
If you are willing to wear the extra costs then do it!
Click to expand...

I think it's my only option if I don't want to end up a childless old cat lady ;)
Despite all the stresses and imminent perpetual poverty and so on I'm really looking forward to the whole process :) :)
 
Strawberry_lovemuffin said:
Hoptis: so building = headaches? Is that the sum of it? I know my sister built and Dale's parents recently built and we did certainly hear lots of moans and groans about surprise costs and late tradesmen, and things ordered/installed wrongly etc. That's one of the reasons I wanted to buy outright - I really can't be fucked with all that.
Click to expand...

My parents did have a few headaches, but they also now have their dream home, but from my point of view, it seems like the sort of thing you might do if you had heaps of money to throw at such a project.

I would never consider building but then I wasn't looking at homes, just apartments and within a certain budget. Building vs buying is something you probably need to research and decide on before going any further (lol... duh Captain Obvious).
 
kryalkastleE said:
Usually it is given AFTER or at SETTLEMENT. At last check it was $14,000 but they keep changing it, and with new parties coming to Victorian government it could all totally change.
Click to expand...

I got my approval in the mail the other day, it's definitely $10,000 in Vic right now but I think changes from either the end of this year to $7,000.

Whether you build or buy, the FHOG is paid when you actually move in so I don't think it's possible to use it as a deposit because typically you pay a deposit when you make an offer on the place.

kryalkastleE said:
Never ever offer what the vendor is asking. Always offer at least $10,000 less. real estate agents usually advertise $20k or more above what the vendor wants. Dont wait for the open for inspections. if you like a house call up and make a time ASAP. If it is an awesome house by the time the inspections rolls around it might not be there anymore.
Click to expand...

Spot on about getting in quick on a really nice place. There are certain suburbs where places can go even before the first weekend it's open for inspection because keen people get in and organise early inspections with the agent... though this doesn't happen that commonly.

Most agents will try to make you believe it's the case with every property and you need to buy yesterday or it'll be gone.

Regarding price, the best thing you can do is hang out on realestate.com.au or domain.com.au and keep an eye on properties and how much they end up selling for. Some ads do tell you how much a property is eventually sold for.

This is important because it gives you an idea what to offer and what is realistic. Negotiating the price of a house with an agent is one of the most nerve-racking things you could possibly do so it really helps to know what a place is actually worth and the only way to do that is to research.

To give you an idea, the place I bought was listed for $250,000 and I bought it for $236,000. Some places sell for an even bigger margin from the listed price, some not as much, just depends on the property and the area.

In regards to finance, it seems you have no choice but to borrow 100%. It's worth getting it sorted out and getting pre-approval before you start looking for a place. Less hassles down the track.

Another site I found really useful was the Australian Real Estate Blog. Uhh, but don't read it too much or it'll make you completely paranoid about dealing with agents, but there's a few really good stories about how things can go horribly wrong when buying a place.
 
Strawberry_lovemuffin said:
^ Why? And what's that?
Click to expand...

An adjustable rate interest only loan is a loan that sets people up for foreclosure:

"Seedy" loan lenders have been using them in the USA to sell people homes they can't afford.

In a traditional 30 year mortgage, You have a fixed interest rate. When you pay your monthly bill, some of the payment goes towards the principal (paying off the house) and some of it goes to pay for the interest.

With the interest only mortgage, All of your monthly payment goes to paying interest ONLY. You never build up equity in your house. You can pay the loan for 30 years and still owe the original purchase price of the home. To make matters worse, since the rate is adjustable, when rates go up...your monthly payments go up!

This allows people to buy a higher price house they would not otherwise be able to afford.

Since interests rates are on the rise, people have had their monthly payments go through the roof (no pun intended). They can no longer afford their home and they lose it in foreclosure.

A sad situation...
 
who the fuck would be stupid enough to get a loan like that?

and btw slm, i just dealt with a couple who borrowed a total of $345,000 from aussie home loans, which was almost 100% of what they needed.

they borrowed $344,000 over 360 months on a 7.40% interest rate with a $500 application fee. they said it was the BEST deal they could find atm. something for you to think about i guess.

and exactly what hoptis said, real estate agents will make you think urgently, sometimes they are lying, sometimes not. but ALL real estate agents are LIARS. i know this from first hand experience. but they are still good people, and a lot of the time, real estate agents will take care of first home buyers. it just depends who you are dealing with i guess. but definately never ever offer the asking price. EVER! I think the best way to go about it is to offer well below what they are asking (like$20k) and then when they reject you, go slowly up. if the vendor sees you are willing to negotiate they will most likely negotiate too. a lot of the time the vendor will take a second or third offer because they are desperate to sell.
also if you are flexible on settlement time (say 30,60,90,120 days) they can sell for less too.
 
Charlie Brown said:
1. When settling you will need to go through a settlement agent off some sort, in my experience the real estate agent you buy the house off will offer you their services which is way over inflated...so to save a few hundred bucks see if the bank that approves your loan also acts as your settlement agent..
Click to expand...

WRONG!

Real estate agents don't do settlements. And the bank will not represent you at settlement, they will only represent there own interest, your money.

If you have friends who have recently brought property, ask them what conveyancer they used, and if they had any trouble, because you can get ripped off easily, as it is not a regulated industry. It should be no more then a couple hundred dollars. Avoid using a lawyer, cause they do exactly the same thing as a conveyancer, for a higher price. If you really want to save money, get a book and DIY. But I don't recommend this, as it will probably be more trouble then its worth if you don't know what your doing. If you stuff up the settlement, you will be up for alot more money.

Avoid apply for 100% equity loans. They usually have a higher interest rate, and tighter terms and conditions. They will sell you up at the drop of a hat.

Don't borrow 100% of what they will allow you, the next interest rate move will be UP, it's not going to move down for a while and plus you wont have any left over money to make extra payments where possible. Budget for at least 2 rises.

Mortgage broker's ain't actually too bad. So don't be afraid to pop your head into one, and see what they can offer. Go to more then one broker.

kk - Interest only loan's work great for people who buy house's renovate them, then sell them again.
 
deeCee said:
If you have friends who have recently brought property, ask them what conveyancer they used, and if they had any trouble, because you can get ripped off easily, as it is not a regulated industry. It should be no more then a couple hundred dollars. Avoid using a lawyer, cause they do exactly the same thing as a conveyancer, for a higher price. If you really want to save money, get a book and DIY.
Click to expand...

I don't have a problem with using lawyers, I got a solicitor to do mine. Conveyancer's aren't allowed to give legal advice so if there's any problems with your purchase, they need to consult a solicitor. In terms of price, a conveyancer charges around $300 to $500, I'm paying about $800 for a solicitor to do it.

Conveyancing is a fairly dodgy industry because there's no accreditation, anyone can do it and if you get a bad one, they can completely screw things up.

I would advise not to use a conveyancer or to get finance through someone the agent recommends. This opens up all sorts of conflicts of interests, you want to find someone independent who doesn't know the agent and is working in your interests, not the agents.

Real estate agents have so many tricks, it's mind-boggling... and as a first homebuyer I don't think you can leave your best interests in their hands. They're acting for the seller; don't ever forget that.
 
oh i see :)

and you are 100% correct about real estate agents not being settlement agents. if they did that it would be a conflict of interest and they would lose their license. BUT they will usually be able to refer you to a local conveyancer, which will usually be cheaper than a lawyer doing it. (and btw doing it yourself would be a nightmare. some section 32s and contract notes are about 100 pages long!!)
 
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