Buying your own house is almost everybody’s dream come true, find out what you need to know before you buy.
With the price of real estate rising and the difficulty and complexities of securing a loan, getting your own house seems like an elusive dream. That’s why when an opportunity knocks, you might rush and forget the important things.
Before you let your emotions get the better of you and grab the first opportunity that comes your way, take some time to breathe and re-think everything before making an offer or signing the contract to your dream house, because what might seem to be a dream house in the morning might be a nightmare during the evening. This is not to dampen your enthusiasm, but rather, a fail-safe advice to prevent any problems in the future. It does not also hurt to have a checklist in order to be sure that you do not overlook something.
Things to look out for when buying a house
Checklists are great tools to help you itemise the things you need to do or buy. It helps you make sure that you have not forgotten something. If you make a checklist when doing your shopping, all the more reason why you should have one before buying a house. In addition, the house will be your permanent abode for a long time or maybe forever; thus, it is just imperative that you make a thorough check-up on the property you are buying.
Location, location, location
The first thing that you want to check is the location of the property. You want to know if the area is safe or flood prone. You should also ask about the local council’s rules concerning building requirements if you are thinking of making some enhancements in the future. Moreover, you should also check its accessibility from other amenities in the area. This is extremely important if you have kids you need to bring to or fetch from school.
1. The land
This includes the boundaries and the terrain. The boundary of the property might seem indeterminable, but the fence around it pretty much defines the boundaries. Checking the boundary has another advantage as you can check the condition of the fence around it and the necessary repairs needed. You should also check for trees or boulders around the property, especially if you are planning to add an extension.
2. Outside the house
This not only includes the fences, but the paint, gutters and roof as well. This will help you assess if there are repairs to be made. If the seller has added an extension, you should ask if they comply with the building requirements of the local council. Little things like cracks on the walls should also be inspected.
3. Inside the house
Do the walls need repainting? Are the ceilings and light fixtures in good condition? One of the most effective ways to check inside the house is to look behind the furniture as they may reveal something like paint peeling off or sockets that need repairing. You should also check if there is proper ventilation in the rooms and if noise will affect the house especially the bedrooms.
Understanding the type of your property title
The title will tell you what kind of property you own. This includes everything you need to know about the property which includes easements, caveats, covenants and mortgages. Basically, there are four types of property titles – torrens title, strata title, company title and old system title. The first two titles, torrens and strata, are less complicated than the company and old system titles.
4. Old system title
This is also often referred to as common law title because there is one main or root title that holds a series of titles. Thus, if you are buying a property which still uses the old system, it should be carefully checked in order to ensure that there is no one who has a legal interest in the party.
5. Company title
As the name suggests, the company owns the area but grants individual ownership or right to the shareholders to occupy a specified part of the building. This is common in apartment buildings where the flat units are separately owned.
6. Torrens title
This replaced the old system title and is less complicated. The torrens title gives each piece of land a single certificate title. The title includes mortgages and easements on the property.
7. Strata title
This is an extension of the torrens title concept. This applies to apartments or subdivisions, where each strata is given a torrens title or separate title.[fa_banner article_title="Home Buyers Guide" overview_url="/home-buying-guide-course-overview"]
Counting the costs involved in buying a house
Finding your dream house is one thing, making sure that you have the budget for that dream house is another thing. After checking everything, the worst part will be to realise you are short of budget for that dream. Before purchasing a house, you should count the cost on how much you really need. This includes taxes, ongoing fees and more.
The rate of the stamp duty varies from state to state and depends on the value of your property. Therefore, the higher the cost of the property, the higher the stamp duty is.
Inspection fees, conveyancing, valuation fees ,taxes.. what does it all mean? To find out how much buying a house will actually cost you, check out our guide to the costs of property buying
Building inspection fees
It might cost you, but the peace of mind you have knowing that the walls are sturdy and no pesky pests lurk in your house is worth every penny you spent on it.
When you transfer the ownership or the title of the property, you need a lawyer to do that.
If you need extra financing to buy your house, you need to borrow some money and this will incur mortgage fees.
The list can go on depending on your circumstances, but this list can help you be prepared when you decide to get that dream house of yours. Real estate experts state that home buyers should expect to spend up to 7% of the purchase price in fees and taxes plus the 10% deposit. From these figures, you will have a rough estimate of how much you will spend when purchasing a house.
Check your finances
Make sure you have your finance available before looking at properties, this gives you an advantage over other potential buyers when it comes time to make an offer. An agent will always ask if you have your finance sorted because they (and the owner) wants a sure quick sale. You may be able to get a good deal vs another potential buying making an offer without finance. Check out home loans that give you pre-approval
Purchasing a house is not a trip to the park. However, despite the time, money and effort you invest in it, it is worth it. Just remember that you have everything in place and you have consulted your solicitor about it.