Real Estate Tips for the First Home Buyer

Real Estate Tips for the First Home Buyer
By: Gemma Williams

Buying your first home can be a confusing and daunting experience for the first home buyer. This article takes a look at the costs involved in buying your first home, the first home buyers grant and buying considerations that will help you secure a home that fits your needs.

Defining your Buying Criteria and Budget
Before embarking on your search for the 'perfect' first home, it's helpful to write down a short list of essential elements that you might like, but not necessarily need in a property. This will help narrow down what you really need in a home, and stops you getting caught up in how pretty a property might look, but may be totally unsuitable or out of your price range.

It's also important to make a list of your preferred suburbs, and work out your price range and don't stray from it.

Can I use this property as a stepping stone?
The key to success in real estate is to keep a realistic budget in mind and aim to borrow the least amount possible. Chances are if you are a first home buyer then you are most likely young and can get away with buying a smaller house to start off with. Then step up to buying a larger more expensive home later, when you can afford it. You will be a lot happier with repayments you can actually afford on a smaller loan, and will have money left over to have a comfortable lifestyle.

What should I borrow instead of what they'll lend me...
Banks may be happy to lend you a lot of money, but will the repayments be feasible? Even if you can afford the repayments, will you still have enough cash left over at the end of the week to buy 'little extras' as opposed to just food and bills? It is always wise to buy below your maximum price, which may mean looking at a cheaper suburb or sacrificing that fourth or even third bedroom. It is much better to give up a bedroom, than give up the whole house because you can't afford it.

Do your homework on prices
Do some research , and keep track of the price of homes in your preferred suburb/s to avoid paying too much.

What are the other costs involved?
You need to take into account all the other costs associated with the purchase of a home, and not just the price it's listed for. A property that might seem to be in your budget may exceed it considerably once the other costs are factored in. Based on a loan amount of $400,000 here is a breakdown of some of the additional charges:-

* Settlement Agents fees - $1400
* Registration of Transfer - $172
* Registration of Mortgage - $85
* Bank fees and Charges - $600

Do I have to pay Stamp Duty?
If you are a first home buyer, and the value of a home does not exceed $500,000 then no stamp duty is payable. Where the value of the vacant land does not exceed $300,000 then no stamp duty is payable.

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