News

5 things you need to know when buying your first home

22. March 2018

You’ve been saving for ages, you have found “the one” and you want to make an offer.  There is so much to think about when choosing to buy your first home – deciding if you want build, buying a renovator’s delight ,  co-ordinating the big move, getting funds in order and everything seems to happen so fast.

Here are some helpful tips to help you prepare for the challenge of buying your first home:

1.  The dollars

Most first home buyers have been saving for a long time for their first home.  It can be easy to get swept away with the price when you have your heart set on a particular property.  Thankfully, there are some great incentives for first home buyers that can save you money, but there are also some incidental costs that you may not expect.

It is not just the purchase price you need to factor in when buying your first home.  Below are some other costs to consider:

  • transfer duty (stamp duty): this tax has been around for a while so it may not be much of a surprise to have to pay it, but it can be a fair chunk of cash, so make sure you don’t forget about it and plan ahead.  Thankfully,  there is a concession for most first home buyers which is a great help, and a majority of first home buyers will not have to pay duty on their purchase if the price is $550,000.00 or less;
  • loan fees, solicitor fees, registration fees and insurance: all these costs probably do not come as much of a shock but it does not take much for them to add up.  A lot of first time buyers are not aware that pursuant to the terms of most contracts, they need to get insurance for the property on the next business day following the contract being signed.  If your savings have been cleaned out by paying the deposit you may struggle with the other costs.  The Queensland Government also charges a fee for registration of a transfer of property and these costs generally come out of your loan;
  • first home owner’s grant: the good news is that the first home buyer’s concession is still available in Queensland for new builds.  Subject to certain eligibility criteria, until 30 June 2018 you can receive $20,000.00 towards your purchase of a brand new home  (this is set to go back down to $15,000.00 shortly); and
  • outgoings and adjustments: at settlement, outgoings such as rates, water usage and body corporate levies will be adjusted on the final amount you pay.  Depending on the particular property and when you settle, this amount may be a little or a lot.

2.  What is in the contract

Putting in an offer on a place is usually in the form of a contract, so it is very important to have your solicitor look over a contract before you sign on the dotted line.  Once the contract is fully signed, it is often too late to make any changes unless the other party agrees.  Make sure you have a good think about what it is you want out of the property.  If you are planning major renovations do you need to know if the council is going to approve the changes you have in mind?  If you are building, are there any restrictions on what type or style of home you want to build that will not fit in with your plans?

3.  Searches matter

Searches are often underutilised by buyers in general.  They can seem like a big cost for a little return but the reality is that you might spend a couple of hundred dollars on searches that could save you thousands in the long run.

Having a building and pest inspection completed on the property (and including this as a condition in the contract) is a must if you are buying an existing house.  You do not want to find out about any nasty surprises after settlement.

4.  Do your homework

Make sure you do your research.  Knowing the area, your long term goals and the property values in the area are very important factors before you jump in and purchase your new home.  There are many things that are not covered by the contract, and which you should check out before you sign.  For example: what are the neighbours like? Does the property flood?  Is it affected by road or aircraft noise?  If you are buying a unit or townhouse, do you understand how community titles schemes work, and are you ready for community living?

5.  Be prepared

Time stands still for no one!  In Queensland, time is of the essence in contracts to purchase land.  This means that you may lose your contract, and possibly your hard earned deposit, if you are late with a condition or being ready for settlement.  The best way to avoid problems is to be prepared ahead of time, get on top of things early and engage a good solicitor to help you through the process.  Before or as soon as you have a contract in place, you should be speaking to a financier about a loan (having a pre-approval in place is often a good thing to do, but just be aware that banks may not give the final okay until they have completed a valuation on a property, which can take time).  Also, you should arrange building and pest inspections as soon as possible following execution of the contract.  Do not leave things to the last minute!

Buying your first home is a big commitment and is bound to be a little stressful, but it is all worth it in the end to have a place to call your home.  Using Miller Harris Lawyers for your conveyancing can help take a lot of the stress out of the process, and save you a lot of time.

For more information, contact Lauren Doktor on 4036 9700.