Pitfalls to avoid when buying your next property

The Spring selling season is well underway and the market is showing signs of picking up with the number of properties being listed increasing and auction clearance rates improving.

You may be thinking that now is a good time to get into the market, buy your next home or an investment property. If you are, there are a lot of things you may need to consider: arranging finance and getting the best interest rate, doing your research, finding the right properties and attending open for inspections, just to name a few.

And when you do find the right property you’ll need to enter into negotiations with the vendor or attend an auction, finalise contracts and arrange to take possession.

If you’ve bought and sold property before some of these considerations will be well known to you. If it’s your first property the whole process can be a bit daunting.

But what about some of the other things you need to consider? Here are a few tips on how to get the right outcome and avoid some of the risks and pitfalls that could turn your dream of owning a new property into a disaster.

Casting your net too wide

If you’re just entering the market it can be easy to waste time looking at too many locations and properties if you don’t have a clear idea of where you want to buy and what type of property you really want. Do your homework and research the best options for your circumstances and avoid the frustration of not finding your perfect home. Things to consider that will influence this decision include:

·         Affordability – what can you realistically afford? What would happen if interest rates did go up? Would you be able to meet your repayments? Don’t forget transfer duty, moving and legal costs.

·         Your family situation – how big does the place need to be, how many bedrooms? Is the property your ‘forever’ home or just a step up the property ladder?

·         Do you have a pet – if you’re thinking of an apartment is the complex ‘pet friendly’? Can you get a copy of the strata by-laws to find out?

Make a list of your ‘must haves’ and ‘nice to haves’ in the property you are looking for. No two properties are exactly alike so you need to be clear on what things you don’t want to compromise on. If you are thinking of using a buyer’s agent you will need to be as precise as possible on what your ideal property looks like.

Be prepared to spend 6 to 10 weeks to visit as many properties as possible and refine your thinking and preferences as you go. Make sure you have your finance in order as early as possible and use a mortgage broker to shop around for the best interest rates. It won’t cost you anything to use one.

Know thy neighbour

Buying a new property is always exciting. But sometimes the dream does not always live up to the reality if the people next door are the neighbours from hell. We’ve all heard the stories of people who put up illegal structures or have loud parties or barking dogs.

To mitigate this risk consider introducing yourself to potential neighbours and ask a few questions about the neighbourhood and other property owners nearby. Drive around the area at different times and on different days to see what activity there is and make sure you’re comfortable with the presentation and upkeep of neighbouring homes. If you’re buying an apartment, ask to see the Strata Plan minutes to identify any issues relating to residents’ complaints or financial adequacy.

Know your rights

Most people go through life without encountering any problems with their property. But for the unlucky few that do have problems, there can be significant financial consequences if you don’t know your rights and who to turn to for advice. Problems can include material facts not being disclosed by the vendor, neighbours ignoring building codes, defects with new properties and claiming under builders’ warranties to name just a few.

You can get further information about your rights from the ASIC website on property investing and from the state government departments that regulate the property market (including handling complaints) such as the NSW Dept of Fair Trading. Your local council can also provide assistance about relevant building codes and regulations in the area.

Plan ahead

Life-changing events come in many shapes and sizes – from marriage, children and buying a new home. It can also include expected accidents and illness.  Whilst interest rates are at an all time low, you need to ensure you can cover the repayments if interest rates go up or if you are off work/unemployed for a period of time.

The road to success

Buying a property can often be a time of worry and stress and it can be easy to get discouraged, particularly as there is a high reliance on other people and market factors that you can’t control.

Take the time to think about what you want to achieve and be realistic about your expectations. Make sure you plan for unforeseen events and use the tips above to help you achieve a successful outcome. Don’t forget to talk to your local real estate agent and get on their mailing list for new properties coming onto the market.  Happy house hunting!

Margaret Rochford

Licensed Real Estate Agent

M: 0425 293 919