First-Time Property Buyer in Melbourne Seeking Insight

LChewiebacca on 14/05/2018 - 17:43

Looking for some help regarding property purchasing.

I've been attending auctions in the area to get an idea of the going rate, also to get acclimatise to the auction frenzy beforehand etc, however of course as a first-time buyer I still have some questions.

I have 750k (maximum) to spend inclusive of any fees, stamp duty, solicitors etc and wanted to get an idea of the costs of these so I know what my maximum offer should be, the properties I am looking at are all either apartments/town houses (none are freestanding homes), so in addition what other expenses should I be keeping in mind/checking (strata? council fees? body corporate? anything else?).

Any other things I should be checking as part of due diligence? Whatever insight you can provide is greatly appreciated.

To clarify I'm not looking for investment advice, I would prefer to have a home at this price rather than an apartment/townhouse but the location is necessary, subsequently these are my only options.

Very appreciative in advance for any insight you guys can offer!

Home & Garden

Comments

  • oscargamer on 14/05/2018 - 17:56
    -2

    Google site is currently up ………

    https://www.google.com/search?q=vic+house+purchasing+costs&i…

    • Chewiebacca on 14/05/2018 - 20:38
      +4

      Looking for personal insight, found a tangle of information on google but thanks for nothing.

  • EightImmortals on 14/05/2018 - 18:05
    +2

    Don't make an offer if the RE agent asks you. Dad bought a house in Melb last year and every time he asked the agent what the price was he was told to 'make an offer'. In the end he totally spat the dummy (don't mess with a grumpy 82-year-old) and told them if they don't tell him what the vendor's asking price was they could go and get *******. :) He also noted a lot of agents in the same office working against each other too. So stand your ground, you are the one with the money so you don't have to take any crap. :)

    • Chewiebacca on 14/05/2018 - 21:57

      Yes, I’ve done reading and pretty much have just been planning on having calculating my best offer (which is what this thread is for) and sticking to it at auctions.

      I’ll keep that in mind and won’t be making any early offers.

  • AusGP on 14/05/2018 - 20:53
    +2

    Be careful of body corporate as townhouses still have these. Although I probably would have still bought my current place it certainly was 1.6k of expenses per year I didn't factor in. Also the body corporate can force you to repaint your exterior to a certain colour etc…so not just the fees that can be a trap!

    • zealmax on 14/05/2018 - 21:40
      +1

      More than half of the 1.6K is for your building and public liability insurance. Few hundred for common area maintenance, the rest for management fees and sinking fund. It's not too bad, really.

      • AusGP on 14/05/2018 - 21:57
        +1

        Yeah except I'm in a townhouse in an estate where the common area doesn't involve me. I look directly out onto the street / public park. The main thing is the power of the body corporate to compel residents to do things they don't want if a resolution is passed. Luckily spotted the upcoming AGM agenda item which was not widely known.

        • Chewiebacca on 14/05/2018 - 22:34

          Would you advise asking the agent for info on past body corporate activity to get an idea of how active they are at changing things up? Or just take what the quoted body corporate fees are and run with it

        • EightImmortals on 15/05/2018 - 07:08
          +2

          @Chewiebacca: You can ask but I wouldn't expect an accurate reply from the guy who will be getting a commission from your purchase. :) There may be a place where body corp proceedings have to be posted? My only involvement with body corps over the years is in avoiding them at all costs. :)

  • poboy on 14/05/2018 - 21:15
    +1

    Land appreciates, houses depreciate. Body corporates are a pain, incurring ongoing fees especially with lifts. Travel time to work must be a consideration. Your budget needs to account for furniture. Good luck.

  • foolsgold on 14/05/2018 - 21:39
    +1

    where do you live at the moment? are you in Melbourne, are you from Melbourne?
    Where do you need to live close to?
    - ie. where is work, what is important to you?
    - crime/aterial roads/trams/buses/trains/schools etc
    - do you want a backyard/no backyard
    - kids/no kids

    • Chewiebacca on 14/05/2018 - 21:54

      Yes from Melbourne, location is necessary for religious reasons.

      The properties I’ve been looking at are all perfectly practical and meet our criteria, main concern is how much we actually have to spend on the property after factoring in any expenses that I may not be aware of (and hopefully with your guys insight helps give me a clearer picture!).

      • EightImmortals on 15/05/2018 - 07:12

        Factor in stamp duty (tax) and any borrowing costs. Other ongoings costs are local council rates and your home/contents insurances of course (pro tip keep you home and contents insurance with the same insurer. That will save you bulk hassle in the event of a major claim). Maintenance and yard work can be done as and when needed. Have a building and pest inspection done before purchase. I know that some states are skiving 'land tax' as well but I'm not up on the details.

  • cassidy02 on 15/05/2018 - 08:10

    There are stamp duty calculators online, use them to figure out what it will be at various buying prices. Solicitor should be able to give you a quote, but budget a couple of grand to be sure.

    Outgoings - at settlement, you will need to pay a portion of council rates, water rates, and OC (body corp) fees. These will all vary from place to place so you need to get the info off the agent (Section 32 I believe).

    Remember you'll also be paying double insurance for your old house and new while you're waiting for settlement, and any connection costs for utilities at your new place, plus moving expenses.

    Good luck with the search.

    • Chewiebacca on 15/05/2018 - 14:09

      I’ll check the Section 32 and see what it says, thank you for pointing this out as I didn’t know about paying a portion of fees in advance.

  • Euphemistic on 15/05/2018 - 12:43

    Will your max spend leave you penniless? while 'normal' fees are easy to work out ($2k for solicitor, stamp duty calc online etc) there may be hidden costs that eventuate, ones you can't plan for, like a plumbing emergency or a new fridge because your old one dies when you try to move it.

    Work out stamp duty, add $10k and subtract that off the maximum spend. It is better to have a few $ in the bank for just in case stuff than be caught without enough for food for the next 3 months.

    • Chewiebacca on 15/05/2018 - 14:08

      You’re definitely right, our max spend isn’t leaving us penniless and I’ve pretty much done that, stamp duty calculates at ~40k (obviously depending on purchase) so we’ve been lenient and worked assuming 50k etc, and applied this in general.

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