Purchasing a new home: Our top five tips to make sure you get the best deal before you make an offer 

Introduction  

Are you thinking of purchasing your first home, or adding to your investment property portfolio?  

Then you need to know these top five tips if you want to make the best decision when making your purchase.   

Recently AA Finance Solutions hosted a gathering in which purchasing a first home, and property in general, was discussed.  

SellingKey Canning Vale real estate agent, Alexander Moss, attended the event and gave some worthwhile advice to guests about what to keep in mind when making an offer for a property.   

I’ve compiled his advice into five key areas and expanded upon them. If you want to make an offer a seller can’t refuse, make sure you’re aware of these crucial tips when you go to put the price on paper. 

Key advice  

Firstly, you want to make sure you have pre-approval from a broker or bank. It is important to be aware of your budget and borrowing capacity before committing to a major purchase. Speak to a trusted financial advisor, a mortgage broker, and your bank before making any major decisions when it comes to purchasing property.  

Second on the list is to make sure you do your research. When putting forward an offer make sure you understand the market value of the property, and also be aware of any extra costs that might hit you down the track such as renovations you may plan to do. If you’re certain that you want to buy a particular property, you also want to make sure that you know what other people on the market are going to promise for it. After all, you don’t want to miss out because you could have given a better deal to the seller.   

Thirdly, look at the property from a long-term perspective. It is better to buy a bigger block of land which will appreciate (unlike buildings which depreciate), in a good location and close to facilities such as schools, parks, and shops. It is important to find a property with potential rather than simply the cheapest option. After all, a property – whether you choose to live in it straight away or rent it out – is an investment down the track.  

Fourth on the list is one of the most important tips of all. What is your objective when buying? Is it to rent out to tenants? Do you want it to be a life-long home for your growing family? Or do you want to renovate and then resell for a greater price? This will impact not only the type of property you purchase, but also the price you may be willing to pay. 

Lastly, sometimes it’s better to pay more in order to get a better long-term investment. We all know what it’s like to buy a cheap pair of winter boots that fall apart by the end of the season instead of the more expensive boots that would have lasted ten times as long. Housing is the same. If you are a first home buyer, or purchasing another property, it can be better in the long run to spend slightly more for a higher-value house. For example, if a first home buyer has $24,5000 in funds, they can purchase a property worth $400,000. However, if they saved a little more and had $42,000 in total funds, they could purchase a property worth $500,000 – a $100,000 jump in property value for $18,000 more in funds. This jump works out even better for those who are not first home buyers. To purchase a $400,000 property, the buyer requires $37,515 in total funds. But to buy a $500,000 property, the total amount of funds required is $47,265. This means that for less than ten thousand dollars extra, a buyer can purchase a house that is worth $100,000 more than the house they originally planned to invest in.   

Checklist  

• Pre-approval is a must! 
• Research, research, research.   
• Look at the bigger picture.   

• What is your goal, and what can you really afford?  
• Sometimes you have to spend money to make money.   

Make sure you’ve ticked off this checklist by the time you need to make an offer on a property.   

Better yet, start thinking about these points before you even start house hunting, as it will help you narrow down what at times can seem like an overwhelming number of options, and lead you to make a more informed purchase.  

Conclusion   

Remember these tips and tricks when you begin to think about what offer you should make, or would be prepared to make, for a property.  

If you’re thinking of purchasing your first home, or adding to your property portfolio, why not contact one of our experienced financial advisors for a free consultation at (+61) 433 068 970.   

Or if you’d prefer to talk in person, just drop by our office between nine to six from Monday to Friday for coffee and a chat about your financial wellbeing.