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First home buyer's guide for Victoria

Buying your first home is an exciting time in your life. To stay on the enjoyable side of the process, it pays to be organised and keep on top of the relevant information and steps.

It goes without saying that most first-time buyers want a property which suits their lifestyle and which will grow in value over time so they can take a step up the property ladder. While all of this is important, it’s one part of the overall path to buying the right place.

For a complete guide for first home buyer’s in Victoria, we have put together a step-by-step checklist of information to help make the process as seamless as possible.

1. Work out what you can afford

When you want to buy your first home, the place to start is working out what you can afford. For this stage of the process, it’s a good idea to engage a financial advisor to ensure you don’t over extend yourself and to get clear on what you can afford.

Get your finances in order

In addition to thinking about how you’re going to pay for a house deposit, the first step in working out what you can afford, is looking at your earnings and budget and then figure out exactly what you will be able to repay each week. This is crucial so you can find out how much you will be able to borrow, how much your repayments will be and so you can work out if you have enough now to cover the deposit or whether or not you’ll need to set a savings goal and schedule to get you there.

Consider all of the associated costs with buying a home

Don’t get caught out not factoring in the associated costs with buying a house. You will need to factor in stamp duty, conveyancing costs, and inspection fees.

Research what concessions and grants are available to you

Don’t forget to look into any concessions and grants that are available to you when buying your first home in Victoria.

You can find a complete list on Victoria’s State Revenue Office website for First Home Buyers. The main ones to look at are:

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Off the plan purchase

2. Get your house deposit together and look at your loan options

Once you’ve worked out what you can afford, factored in all of the associated costs and are clear on where you currently stand with your finances, now it’s the time to get your deposit together or start saving it.

  • To avoid paying lender’s mortgage insurance, you should aim for at least a 20% deposit.

  • If you don’t have a deposit already you will need to set up a savings account to get it together. Another option is to look into the First Home Super Saver Scheme (FHSS) to help you get there faster. The FHSS scheme allows you to save money for your first home inside your super fund. This will help you save faster with the concessional tax treatment of superannuation.

  • If you’re struggling to get a 20% deposit together, in Victoria there is also a scheme called the HomesVic Shared Equity Initiative. It allows first home buyers to purchase a home and qualify for a home loan with a deposit of 5% or more.

  • Once all of the above is done, you should start working out your loan options and mortgage companies. Be sure to factor in rates and lenders’ fees.

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3. Start actively researching potential properties on a weekly basis

Now the fun can begin – it’s time to start getting serious about finding a home and looking at potential properties. You should keep abreast of what is going on in the market on a weekly basis and start inspecting homes as often as you can.

Research areas you’re interested in

Now that you know what you can afford, you can start to work out what areas have properties that meet your needs within your price range. A good place to start with the Research Suburbs tool which will guide you on the median property prices in different areas as well as let you keep track of recent sale prices.

Check weekly sales results

It’s a good idea to stay on top of the weekly results in the areas you’re interested in. This will also give you a good indication if things are selling in the price guide they were marketed in.

Attend inspections and auctions

Attending inspections and auctions will not only allow you to get out there and start physically seeing what you can get for your money, but will also give you the lay of the land and prepare you for when you are ready to purchase.

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Find a conveyancer, property lawyer

4. Find a solicitor, conveyancer and other experts to help you find the right property

When buying a house you need to call in the professionals to help you do your due diligence.

Choose a conveyancer or solicitor to work with

Conveyancing is simply the legal term for transferring ownership of a property. This is completed by either a conveyancer or a solicitor. A typical conveyancing transaction generally consists of three stages – pre-contract, pre-completion and post-completion.

Arrange the relevant experts for building and pest inspectors to work with

Before making an offer or bidding on a place, you will want to make sure you have the building inspected by accredited experts to ensure there is nothing wrong with the place or no pest infestations. You won’t always need a pest inspection, but if you are buying in an area that is known for problems in this area, it’s a good idea to get one.

5. Shortlist suitable properties

Once you have all of your finances in order and the experts tentatively lined up, you can start shortlisting properties and get serious about which ones you want to have inspected.

Shortlist the properties that tick all of your boxes

Once you have shortlisted suitable properties, now is the time to inspect them. It’s a good idea to view places a few times and bring a trusted family member or close friend for their opinion. It’s a big decision and you want to do your best to make the right one.

Get the relevant inspections complete

Once you are sure you are interested in making an offer, it’s best to first get a building inspection and pest inspection completed. And if buying at an auction, make sure you get a copy of the inspection report prior so you can go through the conditions as you cannot add any on the sale of a property without the vendor’s agreement.

6. Prepare the relevant paperwork and get ready to buy

Once all of the relevant inspections are complete and you’re closer to wanting to make an offer on a place, now is the time to make sure all of your paperwork is ready and you have a strategy for making and offer or bid. You’ll want to go through the following:

  • If you plan to buy at auction, arrange a pre-approved loan. You cannot make the contract of sale subject to finance without the vendor’s agreement if you buy at auction.

  • Get a statement of information from agents. Make sure you ask enquire about any items that appear to be fixtures of the property but could instead be items which the seller may remove at settlement.

  • Decide what your strategy for making an offer for a sale or for bidding at auction will be and think about how you plan to stick to this.

  • Familiarise yourself with your cooling off on a property for sale rights.

7. Purchase your home

Now you are ready to make an offer on a property or bid at an auction for a place. If you have followed all of the above steps, at this stage you should be ready to:

  • Arrange payment of the deposit on exchange of contracts.

  • Negotiate a settlement period that suits you and the current owner.

  • Gather all the required documentation and prepare for settlement.

  • Complete the final inspection. Check everything off in the due diligence checklist provided by the estate agent.

  • Pay stamp duty and land transfer fees.

  • Receive transferred title deeds and documents

8. Prepare to move into your new home

Congratulations, you are now ready to start planning to move into your new home. To ensure moving day is smooth, here’s a basic checklist to go through before getting the keys and settling in your new abode.

  • Arrange electricity, water and other utilities, including getting the internet and phone organised.

  • Get the new keys and consider changing the locks if you’re worried about security.

  • Think about any maintenance work that needs to be done prior to moving in – deep cleaning, painting and so on – and arrange and book this in advance so everything works with your timetable.

Buying on a budget does mean being selective but with plenty or research and lots of footwork you can make 2020 the year you secure your first home.

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