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Buying a home is considered to be a serious financial investment, and this is because it's going to be one of the most expensive purchases you'll ever make. If you're considering buying a home, there are several things you'll need to think about.
To make the process smooth for you, this article provides a home buyer checklist of crucial things to consider so you don't forget anything. Keep reading to find out more.
Finance Checks
One of the first things to do is to save the deposit for the house. This is usually 20% of the purchase price, but you can pay a higher percentage as this usually has some benefits. For example, you'll end up with a lower mortgage repayment, and the extra money you save could make buying a better property easier.
It's important to note that Australia has a very competitive home loan business, so you must make the right home loan choice. Also, personal loans come with different terms and conditions, so you need to fully understand every mortgage detail.
Another important thing is to have an extra 5% of the purchase price before the purchase. This covers other costs like pest and property inspections, valuation fees, stamp duty on transfer, conveyancing or solicitor fees, and other expenses.
Location Considerations
It would be best if you also considered the neighbourhood where the house is located. Key questions to ask yourself include:
- What is the value of the local property?
- What is the proximity to the nearest bus stops, train stations, restaurants, hospitals, and shops?
- What are the burglary rates in the region?
- Are there plans for significant developments in the area?
Regardless of where the house is located, you must also determine the type of neighbours you'll have. Be sure to check the drainage system available in the area because poor drainage and flooding can be a problem.
In addition, check whether there are bars, sports grounds, and other noise sources nearby. You must ensure that schools are near the property if you have kids.
Home and Contents Insurance
If you're underinsured, you might face the consequences if your home gets affected by a bushfire, burglary, storm damage, vandalism, leaks that flood the property, and other unforeseen damages.
Statistics show that about 25% of households don't have home and contents insurance. This is surprising, considering the average value of contents in Aussie homes is more than $60,000.
Before buying home insurance, it's advisable to go through the key fact sheet and product disclosure statement. Ensure you fully understand everything the policy covers before paying for the home insurance.
Building Inspection
A building inspection is vital before you buy a house, and an insured and licensed professional should perform this. The professional will give you a building inspection report, and it's worth noting that this differs from the pest inspection report.
Another thing to note is the building inspection cost, which can be up to a few hundred dollars. However, performing a building inspection is worth the investment. Here are some reasons why you should perform a building inspection:
Structural soundness
You wouldn't want to buy a house that's not structurally sound. This can bring safety risks and result in substantial repair bills. The inspector will examine the property's structural integrity and determine whether there are issues like faulty roofing, sagging walls, water damage, etc.
Identify safety issues
Ensuring the home you buy is safe is very important, and you can achieve this through building inspection. The inspector will check for safety issues like loose railings, cracks in walls , the presence of asbestos, and other potential sources of hazards.
Price negotiations
Another benefit of a building inspection is that it will reveal to you the level of repairs and renovation required by the building. This is an excellent step towards negotiating a lesser price for the property.
Before paying for the property, obtain a building inspection checklist and perform your own inspection; check the laundry, kitchen taps, and toilets to ensure they function correctly. You might also need to check that doors and windows are opening and shutting correctly and look out for p dampness in the house.
Pest Control Inspections
Apart from the building inspection, having the home inspected for pests is vital. This will also require the service of a professional and licensed pest control company. Some signs of pest infestations are usually obvious, and you can quickly identify them yourself.
For example, you can quickly notice half-eaten or rotten fence posts, bulging or blistering paint, and termites in trees close to your house. However, the best way to perform a thorough pest inspection is with a professional.
A pest control inspector will help you identify different pest issues, including those caused by cockroaches, clothes moths, spiders, mice, wasps, and ants. These are vital things to be aware of before paying for the property during home-buying.
Appliances Check
Many home buyers forget to check whether the built-in appliances in the home are functioning correctly. This includes the oven, stovetop, air conditioning, hot water, and central heating systems. The presence of these appliances in the house doesn't automatically mean that they will be functioning correctly.
Other appliances to look out for include electric garage doors, intercom systems, ceiling fans, and alarm systems. Regardless of what the house is equipped with, it's vital to ensure they all function correctly before you buy the house.
Title Search
This offers official records about the property's ownership history for home buyers to examine. It's a way of ensuring that the seller is legally permitted to sell the premises and that no encumbrances or liens can prevent the entire buying process.
Every territory and state in Australia has its own requirements for title searches. Therefore, it's crucial to cross-examine these requirements based on your current location. You can also seek guidance from a conveyancer.
Public Transport
Reports show that only 1 in 10 Australians use public transport daily to get to and from work. However, ensuring that you have trains and buses near your home is vital. For trains, you may need to ensure that there's a station within a walkable distance of your house.
However, ensure that it's not too close because this can be a potential noise source. Compared to sitting in traffic in your own car, you'll realise that walking from a bus stop or train station is less stressful, so you should consider proximity to public transport when buying a house.
Long-Term Investment
There is currently a housing shortage in Australia, which has made real estate a good investment opportunity. If you're considering buying a house to place on rent, you stand a chance of generating a steady source of income. This is also a great way to create tax savings with the aid of negative gearing.
Therefore, it's essential that you check the tax treatment that applies to the property you buy. However, there are a few other things to keep in mind to preserve your investment property. This includes terrible tenants, maintenance costs, and other factors that can consume money and time.
Buying a Home the Right Way
You need to make the right decision when buying a property, whether it's a house you plan to live in or just an investment property. You might want to hire a professional and competent property manager to handle the deal, as well as a trained, qualified, and licensed building inspector for other vital property considerations.
In addition, if you have car insurance or motorcycle insurance, you probably understand how important insurance is. The same applies to property; you can purchase insurance cover to provide more protection to your property against unforeseen incidents like rent default or malicious damages.
So, why wait until the property is in your name? Instead, take preemptive action and get a building inspector to check that everything is in order before purchasing.
