Process for buying first home

@Trainee
Not a pro or that experienced of any sorts however I found a couple of podcasts if books/articles aren't your cup of tea - The Property Couch and My Millennial Money Property of interest. MMM-P is pretty basic and selected eps will go through beginner level knowledge. The first set of eps of The Property Couch really set up the basics everything as well. Do recommend both.

 

Ok can you explain why this is a must? Another has said I don't need a preapproval unless going to auction (I'm not interested in auctions, and they rarely happen where I live, most places sell in 2 weeks from my research into similar listings).

I didn't realize the banks can refuse based on those conditions, thanks for the heads up! I can tell you the unit is only 8 years old and is in a really good neighbourhood / post code. It's 139m2 which isn't too bad, not huge but ok for a 2 bedroom unit. I can't see why they'd reject it.

Can't I make the offer conditional to finance and passing inspections? I've read that elsewhere, so am now getting a bit confused as I thought that was possible.

I know, I don't have a crystal ball... but what I'm saying is those things you're pointing out don't really apply to me, I'm not in it at all for an investment, I like the area, and would be happy living there till I die so that's what I meant. I'd have no real reason to move, unless it burnt down, that's the only event I can think of. I know heaps of people see houses as $$$ but I just see them as homes, four walls and a roof. I actually think it would be good if prices started to fall a bit over the next 10 - 20 years, they're way too inflated, and as I'm buying simply to live in a fall wouldn't worry me.

 

@hachoo I'll take a look at these too, thanks!

 

Just like I mentioned, online calcs on about 8 different bank sites. All were pretty similar and say I can borrow up to around $600K, I don't want that much debt. Some of these are online only banks like Ubank who I've been with for about 8 years (no problems with them). They have a good home loan rate, but not sure why/why not I'd go with them? I figure that $400K is way less than the calcs say, so it's logical that it wouldn't be a problem for me to get that much. But I actually wouldn't need that much anyway.

I've been saving for quite a long time and can easily do 20-30% probably even 40% if I really wanted to, but want some cash left over. Which is why I'm thinking a loan with offset account would possibly work for me, unless there's anything I don't know why that wouldn't be a good idea?

So the actual amount I'd need to borrow would really be around $250K. This is why I'm not that worried about the finance side. I don't think they wouldn't approve me based on my own finances which have always been in check, and can't see why they'd reject the unit... though it may happen.

I have looked at other costs, if you mean building inspectors and lawyers? I'd obviously want to keep all that as low as possible (or even free if possible). I've looked into ongoing costs with ownership as well: rates / insurance / body corporate / water ... not sure if I'm missing anything but expect it to be around an additional $6000 a year maybe.

Ok, I'm glad you cleared that up as I was under the impression from a few things I read that bigger deposit = more serious buyer, which could influence the sellers decision. I'd be happy to settle as quickly as possible as well, there'd be no reason to draw things out for me.

I have, as previously mentioned, been doing research for 6 months so I know generally that the $400K price point is pretty average (some have gone for more, some for less). I'd prefer to be on the "less than that" side of it, which is why I have asked is making a $360K offer on a $375K listed property something that others would do? Also, to cut to the chase is it worth just calling up the agent and asking straight out have they had any offers and what the current highest offer is?

The point I'm getting at is if the unit has already had an offer over $400K then as far as I can see it there's no point in me even going to look at it.

 

This is a self contained unit on a block with another 19 units, so basically separate 2 story town houses. It's not an apartment block. Isn't that what the inspector should pick up, if there's any structural issues?

 

I now see where you're coming from, didn't quite realize that it would be a slow process as most dealing I've had with setting up online bank accounts happen really quickly, think my Rams one was instant.

It has sparked another question: if say I did make an offer conditional to finance, and they accepted it, then why would me going to a broker for a loan approval be any faster to me going to a bank? Wouldn't the process be the same and both would take a similar amount of time?
Also, as I'd be dealing with the real estate agent (not the seller) wouldn't they expect from previous sales that approval could take up to 2 weeks? and wouldn't this apply to anyone else making an offer?

 

I think it was me that said pre-approval is not absolutely required if not going to auctions, but I agree with others that you are in a much stronger position to make an offer if you have it than if you don’t.

Re costs associated with buying, these might include:

• Lawyers (don’t skimp)
• Building and pest inspections (don’t skimp)
• Due diligence checks (for many properties, it’s a good idea to get a body corporate records search done and other searches like development plans for the area, flood risk, in some cases even whether there might have been soil contamination on the land will depend on your location).
  
• If your building inspection or other checks turn up something objectionable or your finance falls through, you’ll have to repeat these costs when you make an offer on another property.
  
• Costs of express posting loan documents back and forth, especially if your lender/or lawyers are online.
  
• Removalists, or at least boxes and truck hire
• End of lease clean at your old place
• Any minor renovations that you want to do at the new place
• Rates
• For units and town houses, body corporate fees
• Potentially loan establishment fees
• Unexpected costs of setting up the new place. In my case, there was a minor plumbing problem that the building inspector hadn’t picked up, so I needed to get the plumbers in, the owners had had pest controllers in pre-settlement, but they had done a poor job and I needed to get pest controllers back in, there were a couple of broken light bulbs and a malfunctioning smoke alarm to be replaced, and I realised only after moving in that there was nowhere to store my underwear and tee-shirts, so I had to buy a chest of drawers.
  
• Home owner’s insurance
• Account establishment fees for utilities
• Your ISP might charge a fee to move your account to a new address if you are unlucky
• You might find, for instance, that some of your stuff is damaged or lost during the move and will need to be replaced or that your old land lord has a different understanding of “normal wear and tear” than you do.
  
• You might want to pay the post office to redirect your mail.

Basically, lots of little things can add up. Budget $5000 or so.