7 things peo­ple for­get when buy­ing their very first home

Whitsunday Times - - REAL ESTATE - By REALESTATE.COM.AU

WHEN you’re buy­ing a prop­erty, be­ing un­pre­pared can lead to un­ex­pected ex­penses and have you scram­bling to piece things to­gether at the last minute.

If you’re about to buy your first home, chances are you’re feel­ing a lit­tle out of your depth about what needs to be done.

Even if you are on top of things when you start house hunt­ing, by the time you’ve trawled through a thou­sand prop­erty listings and vis­ited a few dozen open houses, your brain is bound to be a bit foggy.

Here’s a list of the top seven things peo­ple for­get when buy­ing their first home. 1. Loan pre-ap­proval It might seem ob­vi­ous, but don’t for­get to get pre-ap­proval for your loan. This is a let­ter from your lender stat­ing how much you can ex­pect to bor­row. It will help you set a re­al­is­tic bud­get.

Hav­ing pre-ap­proval shows sell­ers and real estate agents you’re se­ri­ous, and should al­low you to move for­ward with con­fi­dence when you find your per­fect home. 2. Stamp duty tax Stamp duty is a tax levied on most prop­erty pur­chases in Aus­tralia. The amount will vary de­pend­ing on the pur­chase price and which state or ter­ri­tory you live in, but it needs to be paid on set­tle­ment, so be sure to in­clude it in your bud­get.

Your home loan spe­cial­ist will fac­tor in stamp duty for you when work­ing out your po­ten­tial bor­row­ing ca­pac­ity, or use an stamp duty cal­cu­la­tor to get a quick idea of the ex­tra cost (in­clud­ing any ex­emp­tions that may ap­ply). 3. Lender’s Mort­gage In­sur­ance If you’re bor­row­ing more than 80% of the house’s value, you’ll usu­ally need to pay Lender’s Mort­gage In­sur­ance (LMI). LMI is a form of in­sur­ance that pro­tects the lender in the event that the bor­rower de­faults. Sav­ing up for a larger de­posit could help you get around this re­quire­ment. 4. Con­tract of sale In the ex­cite­ment of buy­ing a house, it can be easy to for­get about the sales con­tract. You need to get this re­viewed by a solic­i­tor or qual­i­fied con­veyancer be­fore mak­ing an of­fer.

If you’re se­ri­ous about a prop­erty, be sure to ob­tain a copy of the con­tract as soon as you can. 5. Con­veyanc­ing Con­veyanc­ing is the process of trans­fer­ring the le­gal ti­tle of a prop­erty from the seller to the buyer.

The con­veyanc­ing process can be te­dious and com­plex, so it’s im­por­tant to find a qual­i­fied pro­fes­sional con­veyancer or solic­i­tor to han­dle the var­i­ous steps of the con­veyanc­ing process for you. 6. State­ment of Ad­just­ments In the week be­fore set­tle­ment, your con­veyancer or solic­i­tor will pre­pare a State­ment of Ad­just­ments. This doc­u­ment cov­ers the ad­just­ment of any rates, taxes, rental and own­ers cor­po­ra­tion fees ap­pli­ca­ble to your pur­chase.

Your con­veyancer should be able to give you an es­ti­mate of these costs in ad­vance. Re­mem­ber to set aside suf­fi­cient funds to cover your por­tion of the ad­justed rates as part of your prop­erty set­tle­ment. 7. Pro­fes­sional in­spec­tion Even if a house looks good from the out­side, al­ways have a qual­i­fied in­spec­tor check it out be­fore you sign on the dot­ted line. A pro­fes­sional in­spec­tor can spot hid­den is­sues such as ris­ing damp, struc­tural da­m­age and pests.

Buy­ing your first home is an in­cred­i­bly ex­cit­ing time, but it can also be a con­fus­ing process. As al­ways, be sure to con­sult with your home loan spe­cial­ist, who can use their knowl­edge and ex­pe­ri­ence to help guide you.

PHOTO: SHIRONOSOV

GRAND OP­POR­TU­NITY: There’s a lot to re­mem­ber for po­ten­tial buy­ers.

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