Buying a house for the first time can be overwhelming, even when you’re a senior citizen. From choosing a real estate agent to finding the right property and applying for a home loan, it’s crucial that you understand every step of the home buying process to ensure a successful purchase.
If you missed the chance to buy a home when you were younger and can afford to get your own place now that you’re older, you’ll find all the information you need right here to help you with the home buying process.
1. Choosing a real estate agent
It’s important to choose the right real estate agent, so consider interviewing at least three agents before you look for a property. Ask them about their background and experiences, and compare their fees and commissions.
Choose a licensed and reputable real estate agent who has a good knowledge of the property market in general and particularly of the areas where you want to buy a house. The right agent can help you find the right property at the right price and in the right location.
2. Researching the market
Compare similar properties for sale in your desired area and in surrounding suburbs so you know what your property’s true current market value is and to help you narrow down your search. You can also speak to your real estate agent who’ll be able to tell you if one side of a street is superior to the other.
It’s good to talk to your local council as well to find out if any changes are happening in your chosen suburb. For instance, a major road or building construction near your property could either positively or negatively affect its future value.
Likewise, consider reading property magazines and newspapers ( Your Investment Property Magazine or Your Mortgage), subscribing to property reports and newsletters for collating data, and looking at online property portals ( Realestate.com.au or Domain). You can also check Property Value to find out what the average house prices are in a particular area, and to get information on demographics and suburb reports.
3. Finding the right property
Do you want to live in a townhouse or a standalone house? Whichever you prefer, make sure to consider your needs and do your research. As a senior homebuyer, you might just want a small house to live in, or a house that you can expand to make room for your grandchildren to play.
When looking at other similar properties for sale in both the area you want to buy in and in surrounding suburbs, note the number of bedrooms, size, amenities, as well as the asking price and sale price of the property (if available). Also check the age and condition of the property – you want a home that is as good as new to save money on maintenance and repairs.
It’s important to go to open inspections and find a property in your price range and that has what you need. Moreover, if you plan to sell your house in the future, buying a property that will increase in value is the best way to go.
4. Finding the right location
There are number of things to consider when finding the best place to live. If you’re still working and you drive to and from work, you’d want a house that’s close to your workplace. If you prefer to take public transport, on the other hand, then being near a bus stop or train station is ideal. Living close to a shopping centre is also a great idea, especially for those times when you need to quickly stock up on groceries.
5. Budgeting and saving for a deposit
Buying a home costs a lot of money so you need to budget and save for a deposit. You should look at your income and expenses and start cutting back on non-essential expenses. Your income, savings and how well you stick to your budgeting plan will give you a clear picture of the loan amount you can borrow.
If you’ve got plenty of money, you can choose from a variety of home loans. Generally, you’ll need at least 5% of a property’s value to get a loan. If you don’t want to pay Lenders Mortgage Insurance, however, then you should have a 20% deposit.
Having a deposit shows potential lenders that you can exercise financial discipline over a long period of time. What’s more, the bigger your deposit the larger the equity you have in your property from the beginning, so you’ll end up paying less interest in the long run. It’s best to save your deposit by taking out a high-interest savings account.
6. Applying for a loan and the first home owner grant
A mortgage broker can help you find the right loan for your needs. When comparing home loans, consider the lender, borrowing amount, loan period, interest rate per annum (variable or fixed), comparison rate per annum, application fee, ongoing fees, maximum LVR (Loan to Value Ratio), and monthly payment.
Also apply for the First Home Owner Grant in your state or territory at the same time as you apply for your loan through your lender so it’ll be processed faster. Make sure to apply for these early, as you don’t want to lose your dream home to someone who already has the finances. Having a loan pre-approval from the start, as well as a deposit, can give you an advantage over other buyers.
7. Checking on other costs
Apart from real estate agent fees and Lenders Mortgage Insurance, other costs you need to consider when buying a home include interest rate changes, water and council rates, utility costs, body corporate fees and stamp duty.
You should also get a professional building inspector to inspect the property you want to buy to check if there are any faulty wires and plumbing, shifting foundations, or other problems.
8. Understanding the contract
Once you’ve found the right property and agreed on a final sale price with the seller, get a qualified solicitor or conveyancer to prepare the documents for the registration and transfer of the property and to provide legal advice on the sale contract.
It’s vitally important that you read the contract thoroughly and understand your rights and obligations. Also check if the contract has an opt-out or cooling off period. After you sign the contract, the house is yours.
Need financial help?
Whether you want financial advice, services or products relating to the purchase of your first home, Pinn Deavin can help you. For a no obligation chat, call us on (02) 8525 3700 or send us a message.