Buying property - the basics, process, tips and tricks

Finally decided that it's time for me to move out. Been saving up for a few years and now looking to buy my first property. I know there's been a few threads in the past regarding various aspects of the buying process but hoping for this to be a more high-level and holistic view of the basics, process and any tips and tricks along the way. Basically, where do i get started and what are the things I should look out for.

When I do end up learning the ropes and getting my place, I want to create a property guide as a wiki for this forum, i think it is a popular topic and would be useful for many. But in the meantime, appreciate all your responses here. Cheers!

Comments

  • +1 vote

    Go to banks and or mortgage lenders. Get a pre approved loan. This will give you an idea how much you can borrow.

    Then decide where you can get a property to this amount or less. Start to narrow out suburbs. Check out whats on offer in these areas. Inspect as many as you can to get a gauge or feel for what appeals to you feature wise.

  •  

    Auctions are entirely in the seller's favour, so avoid at all costs as a buyer.

    • +2 votes

      Nope. If there's not much bidding competition, the seller is under significant pressure having outlayed the marketing/auction costs.

      •  

        Not sure that the outlay of a couple of grand on auction costs really causes significant pressure compared to dropping a reserve/price by 10s or 100s of thousands.

        More often than not the seller either gets the price they are after (or more), or passes it in. Only real way to get a 'bargain' is if you somehow know the value of the property better than the seller and agent and everyone else (unlikely).

        •  

          Only real way to get a 'bargain' is if you somehow know the value of the property better than the seller and agent and everyone else (unlikely).

          This doesn't make sense. Knowing the value is irrelevant - it changes over time and with different buyers/sellers. Are you suggesting e.g. if the "true" value is say $1m but everyone thinks it's $900k and you buy at $900k, then you get a bargain, and hope that one day everyone wakes up to its "true" value.


          A buyer is more likely to get a 'bargain' if the seller is motivated to sell and the buyer isn't too invested in it.

        •  

          I think thats no longer true of all auctions. Seems like some auctions recently I've been to where its sold for good prices.

  • +2 votes

    Step 1: google it. There are lots of buying property guides on websites. Real estate sales sites, mortgage broker sites, bank sites.
    Step 2: check how much you can borrow, then work out how much you would like to borrow. Tip: don't borrow as much as they will let you, pick something a fair bit lower so you aren't maxing out while interest rates are low. Rates will rise (probably not straight away) and your loan will cost more.
    Step 3: start searching for a property to buy. Make a list of must haves, nice to haves, things you would prefer not to have and deal breakers. Stick to it, you will most likely have your Propety for some time, it is a lot harder to sell up than break a lease.
    Step 4: buy.
    Step5: stop eating out, pay it off quick as possible.
    Step6: repeat 2-5 when you situation changes and you need to purchase again.

    •  

      Step 5 : Stop eating out for 10 - 15 years and live your life like nothing, let the time pass on its own. Before you know it, you're in your 40s plague with health issues or possibly a cancer or 2.

      Conclusion : If you're in a good position with foreseeable future prospects then go for it. Else, weigh your own weight.

  •  

    Having recently gone/going through purchasing a property:

    1. Learn the basic stuff from other sites. In summary:

    - See a bank, work out what you can afford without overstretching
    - Work out all your costs including stamp duty
    - Get a pre-approval for you loan
    - Work out where, and what kind of property

    1. Research research and research (and focus)
      This is really important. Without this there's no way you know whether a property is worth it. You will figure out how much a property will go for, without being fooled by the quoted range. The only way to do this is grunt work - inspect properties and attend auctions every weekend. You will only be able to focus on a suburb or two but get to know the market.

    2. Don't get over attached.
      You will likely lose out quite a few times particularly if you're starting out and underestimate the prices. I know I did. However don't despair, theres often another property around the corner thats even more perfect. I know thats how I found my current place several years ago - and having learnt all the lessons and did all the hard yards knew exactly how much to offer pre-auction to seal the deal. Remember that your turn will come (as long as you learn the lessons!! - you will often hear people missing out repeatedly and thats because they are either being fooled by the "quoted price range" or they are going at the limits of what they can afford).

    PM me if you got questions!