Lots of good advice here already. I will add, if you haven’t already, get a spreadsheet out and make a budget to know exactly what your living costs are. Put in everything - food, car, entertainment, healthcare, insurances etc. Now add in the extra costs that you would have if owning a house - house insurance, rates, body corp if buying a unit. Then see what amount of money if left for repayments. Next, work out what size loan you can afford based on how much you can afford for repayments, but make sure to estimate at a higher interest rate than is current, because this a pretty much a certainty in the next year or two. Now you can start narrowing down what kind of properties and which suburbs to look in. Look in suburbs where you can afford the median house price. Don’t forget to factor in stamp duty into the purchase price. This will mean you are at least looking mid-market, so won’t be restricted to renovators delights. Good luck.
Everyone’s covered money and process well so far, so I’ll just add some advice.
A global pandemic really helps. I’m not kidding. Never let a good crisis go to waste. Be prepared to strike when opportunity presents itself.
We brought in covid, and couldn’t afford this place if it went on the market today.
If you can, going country can help. Warragal got expensive, but further out isn’t too bad so long as you don’t have to do the city 5 days a week. Seymour has houses for under 400k, and a vline to Melbourne taking 1.5 hours (which isn’t THAT much worse than Pakenham to Melbourne).
Engage a mortgage broker. This will use some of your money but it is well worth it. They will be able to help you go over your finances and see what kind of loan you can get, they will do all the legwork finding out best rates and such, and you can even state preferred banks. They will also do all the negotiating with the bank for you, so you just need to look over what they present you, nod assent or shake thy head and then provide some ID and signatures.
When you have your loan, you have your budget. Begin looking at places within this budget, preferably below it so you have some wriggle room for reno or repairs. When you find a place you like enough to attempt to purchase it, engage the services of a building inspector (this will cost you money, but is worth it). The REA flogging the place will not bat an eye at this and will allow them access to do all their bits and bobs.
look over the building inspection report and see if there are any deal breakers. If not, then place an offer usually “pending finance” (see below). This will bandy back and forth between the REA and owners a bit.
If all goes well and everyone agrees, there is usually a deposit to be paid and then the bank will shove its beak into the property, looking here and there and making sure that it’s worth what they’re lending you. This is the pending part. They will also request you get insurance on the property (this will cost you money but is worth it). If all goes well, they say yes, you may purchase it with your loan and you start the torturous crawl towards the settlement date.
Once settlement date arrives the bank transfers the money to the seller, the debt to you, and the keys are placed in your hand.
There also a conveyancer required to handle the actual transfer of the money and legal documents. At one point all the parties would have a rep that would physically meet up and hand over paperwork and cheques, but I presume it’s all electronic these days.
That would be good. My brief stint at home ownership was about 25 years ago and I don’t think brokers existed at that stage - there weren’t many options for loans either, you really just went to the bank you had your account with. It’s all changed so much.
yeah those two are the priciest rooms :/ Once you get plumbing involved you’re rather farked. Also most likely to have asbestos in older houses as it was used for waterproofing
Boyo is an unlicensed builder carpenter. Good for spotting issues even if can’t do the paperwork. Hopefully asbestos nasties won’t get under the radar!
Step 1 - sort the money - talk to bank about borrowing limits, knowing that these can change in a blink of the eye. If you can get a guaranteed borrowing amount GET THAT IN WRITING and the expiry date.
Step 2 - look at houses available. Set up list of criteria in 4 sections - 1) Must have 2) Nice 3) Nice but can do without 4) Dealbreakers. Get agreement from spouse and kids on these.
Step 3 - identify possible purchase. Then get council reports, engineering reports, architectural reports - and any other reports you think apply like flood prone land, possible future freeways, asbestos and other soil contamination etc. They are cheaper than remedial works - trust me on this.
Step 4 - start negotiations. If the house needs essential work, an estimate of price of the work (not from the REA) should form part of your calculations. If they want the $$ fast, expect to get a substantial discount for settlement in less than 60 days. Don’t allow REA to panic you into a fast decision. You might want to employ a purchasing agent - they charge a fee but do Steps 2, 3 & 4 for you once they have your criteria. As these are the difficult bits, this might be time/hassle effective.
Step 5 - pay up.
Step 6 - move in.
Step 7 - discover all the stuff that you should have done in steps 2, 3 and 4 above. Scream and regret not having a father/brother/sister/cousin with electrical/gas fitting and other general trade qualifications.
Step 8 - install petunias
Source: purchased just before the pandemic. Yes I did employ a purchasing agent cos I was ignorant/out of date of all that stuff. Seamless experience which I recommend. They even went to the auction and bid for me (within the limits I’d set) so I didn’t have to panic about that either.
Happy to provide. The firm is Select Property Advisers based south of the yarra but can act all over Melb. My agent was Michelle. She was an REA for twenty plus years and left industry in disgust, but has vast knowledge of the dodgy tricks other REAs try on newbies routinely. She was a tireless advocate for me. I purchased with full knowledge of what needed to be done in the next 5 years, the next 10 years as separate categories to help me with the purchasing decision, and generally went out of her way to ensure I got the best possible place for my price range. All my criteria were met, and the price at auction was actually a bit less than I was expecting. I think she scared the REA conducting the auction into good/legal behaviour.
Thanks. The criteria bit has been discussed at much length. The no. 1 bit how much can we really is the biggest right now. Needs an app with 🐏 or similar.
How do you buy a house? Real question.
It seems like 8000 steps all of which cost money before you even look at a place, let alone start installing petunias.
Talk to your parents and sibs.
See how much assets the family owns.
Discuss if you want share buying a house, if anyone is up for being a guarantor, if they will help with deposit.
See how much you can repay every month.
Organise first home buyer benefits.
Look at houses that are way less than you can afford. This way you won’t be too stressed.
Try to buy something built in 60s or 70s, even if it’s in a crappy suburb. Be close to PT, hospitals, schools and parks.
Aim to live in the house your whole life if possible. Buying and selling , stamp duty, is a terrible waste of money.
Make sure you have money for maintenance.
I’ll stop you at 1.
Zero speaking terms.
yeah, this is a problem
but it’s how so many people get on the property ladder
this do it all on yer own is not how well off people do it
Lots of good advice here already. I will add, if you haven’t already, get a spreadsheet out and make a budget to know exactly what your living costs are. Put in everything - food, car, entertainment, healthcare, insurances etc. Now add in the extra costs that you would have if owning a house - house insurance, rates, body corp if buying a unit. Then see what amount of money if left for repayments. Next, work out what size loan you can afford based on how much you can afford for repayments, but make sure to estimate at a higher interest rate than is current, because this a pretty much a certainty in the next year or two. Now you can start narrowing down what kind of properties and which suburbs to look in. Look in suburbs where you can afford the median house price. Don’t forget to factor in stamp duty into the purchase price. This will mean you are at least looking mid-market, so won’t be restricted to renovators delights. Good luck.
Step One: have money
If you do not have money: cry
Everyone’s covered money and process well so far, so I’ll just add some advice.
A global pandemic really helps. I’m not kidding. Never let a good crisis go to waste. Be prepared to strike when opportunity presents itself. We brought in covid, and couldn’t afford this place if it went on the market today. If you can, going country can help. Warragal got expensive, but further out isn’t too bad so long as you don’t have to do the city 5 days a week. Seymour has houses for under 400k, and a vline to Melbourne taking 1.5 hours (which isn’t THAT much worse than Pakenham to Melbourne).
have money
Engage a mortgage broker. This will use some of your money but it is well worth it. They will be able to help you go over your finances and see what kind of loan you can get, they will do all the legwork finding out best rates and such, and you can even state preferred banks. They will also do all the negotiating with the bank for you, so you just need to look over what they present you, nod assent or shake thy head and then provide some ID and signatures.
When you have your loan, you have your budget. Begin looking at places within this budget, preferably below it so you have some wriggle room for reno or repairs. When you find a place you like enough to attempt to purchase it, engage the services of a building inspector (this will cost you money, but is worth it). The REA flogging the place will not bat an eye at this and will allow them access to do all their bits and bobs.
look over the building inspection report and see if there are any deal breakers. If not, then place an offer usually “pending finance” (see below). This will bandy back and forth between the REA and owners a bit.
If all goes well and everyone agrees, there is usually a deposit to be paid and then the bank will shove its beak into the property, looking here and there and making sure that it’s worth what they’re lending you. This is the pending part. They will also request you get insurance on the property (this will cost you money but is worth it). If all goes well, they say yes, you may purchase it with your loan and you start the torturous crawl towards the settlement date.
Once settlement date arrives the bank transfers the money to the seller, the debt to you, and the keys are placed in your hand.
There also a conveyancer required to handle the actual transfer of the money and legal documents. At one point all the parties would have a rep that would physically meet up and hand over paperwork and cheques, but I presume it’s all electronic these days.
in our case the conveyancing shash was also handled by the broker. I cannot express enough how much to get one. All the bullshit is Not Your Problem.
This sounds good. An advocate was already in mind both would save brain big time.
That would be good. My brief stint at home ownership was about 25 years ago and I don’t think brokers existed at that stage - there weren’t many options for loans either, you really just went to the bank you had your account with. It’s all changed so much.
Thanks! One of our things is redo bathroom or kitchen but not both. I think that’s reasonable…
yeah those two are the priciest rooms :/ Once you get plumbing involved you’re rather farked. Also most likely to have asbestos in older houses as it was used for waterproofing
Boyo is an unlicensed builder carpenter. Good for spotting issues even if can’t do the paperwork. Hopefully asbestos nasties won’t get under the radar!
Step 1 - sort the money - talk to bank about borrowing limits, knowing that these can change in a blink of the eye. If you can get a guaranteed borrowing amount GET THAT IN WRITING and the expiry date. Step 2 - look at houses available. Set up list of criteria in 4 sections - 1) Must have 2) Nice 3) Nice but can do without 4) Dealbreakers. Get agreement from spouse and kids on these. Step 3 - identify possible purchase. Then get council reports, engineering reports, architectural reports - and any other reports you think apply like flood prone land, possible future freeways, asbestos and other soil contamination etc. They are cheaper than remedial works - trust me on this. Step 4 - start negotiations. If the house needs essential work, an estimate of price of the work (not from the REA) should form part of your calculations. If they want the $$ fast, expect to get a substantial discount for settlement in less than 60 days. Don’t allow REA to panic you into a fast decision. You might want to employ a purchasing agent - they charge a fee but do Steps 2, 3 & 4 for you once they have your criteria. As these are the difficult bits, this might be time/hassle effective.
Step 5 - pay up. Step 6 - move in.
Step 7 - discover all the stuff that you should have done in steps 2, 3 and 4 above. Scream and regret not having a father/brother/sister/cousin with electrical/gas fitting and other general trade qualifications. Step 8 - install petunias
Source: purchased just before the pandemic. Yes I did employ a purchasing agent cos I was ignorant/out of date of all that stuff. Seamless experience which I recommend. They even went to the auction and bid for me (within the limits I’d set) so I didn’t have to panic about that either.
Could I trouble you to share your purchasing agent? Here or perhaps DM if you prefer. :)
Happy to provide. The firm is Select Property Advisers based south of the yarra but can act all over Melb. My agent was Michelle. She was an REA for twenty plus years and left industry in disgust, but has vast knowledge of the dodgy tricks other REAs try on newbies routinely. She was a tireless advocate for me. I purchased with full knowledge of what needed to be done in the next 5 years, the next 10 years as separate categories to help me with the purchasing decision, and generally went out of her way to ensure I got the best possible place for my price range. All my criteria were met, and the price at auction was actually a bit less than I was expecting. I think she scared the REA conducting the auction into good/legal behaviour.
Thanks. The criteria bit has been discussed at much length. The no. 1 bit how much can we really is the biggest right now. Needs an app with 🐏 or similar.
Thanks for the petunias 🌸