Becoming a homeowner is almost everybody’s dream, but it can turn into a money pit if you don’t know what to watch out for. When buying a house, many people tend to focus on aesthetics, mainly how the house looks overall. However, they don’t always pay attention to other less obvious things that can affect their comfort once they move into the house. For instance, a great home in a noisy neighbourhood might look like a good deal, but it can impact your quality of life in the long run, especially if you are in the family way or have small kids at home. Structural issues like poor drainage or susceptibility to pest infestation are easy to miss but costly to fix.
Overall, one can say that buying a house is much more complex than choosing a property with interiors you love. There are several other factors to consider when purchasing a home, and having a checklist handy can simplify the process.
Seven important things to check before purchasing a house
1. Research the local area
It’s not uncommon for first home buyers to regret their buying decision. But all mistakes are not easy to fix. For example, what if you don’t like the area where you bought your house or find it unsafe for your family? Perhaps you don’t like your neighbours, but you only realise this after moving into the home.
While there are some things you cannot control, such as your neighbours and their behaviour, you can avoid purchasing a house in the wrong neighbourhood by exploring the local area well.
Remember, the neighbourhood you choose will significantly affect your happiness and comfort. Some of the questions you might want to ask include:
- What is the crime rate in the area
- What is the area’s demography – is it more popular with couples or young crowd? If the area has more singles or students, it might be noisy with lots of bars and cafes around.
- How far are the nearest shops, restaurants, hospitals, train stations and bus stops?
- If you are planning a family, you might want to check the proximity to schools and day-care.
- You should also check with the local council whether any major development is planned for the area, as it can affect the price of your property.
You can find a lot of this information from your real estate agent and through free property reports on various websites. It’s also a good idea to meet your neighbours and talk to them to check whether you get along and get some additional information about the house you plan to buy.
2. Why is the property on the market?
Yes, that’s an important question to ask your real estate agent. Knowing more about a property’s history can put you in a better position to negotiate the price or settlement terms. A seller might be looking to close a sale as quickly as possible because they need money to buy another house or clear some debts. Knowing this information could help you negotiate a lower price if you have planned your finances and you can settle the deal as soon as possible.
Sometimes the seller might want to sell the house because it has some defects, or the family may be going through some issues, and the property title could be disputed. Knowing about these things can help you make a practical decision and avoid additional costs or even an expensive legal battle in future. In any case, it’s advisable to get a title search to check the property’s ownership history to avoid any potential hassles.
3. Get your finance sorted
Buying a house is a huge financial decision and requires a lot of planning. Don’t dive into it without running through your finances.
One of the first things you need to do to buy a house is saving for a deposit. Lenders generally require a 20% deposit, but you might be able to borrow with a smaller deposit if you are eligible for a professional discount typically offered to doctors, lawyers, and chartered accountants.
If you don’t have an adequate deposit, you’ll need to pay for Lender’s Mortgage Insurance, which will add to your home buying costs. It’s also possible to ask your parents to go guarantor on your home loan, allowing you to buy a house with little or no deposit. A mortgage broker can help you understand your options better. Furthermore, it’s important to understand that the deposit is only a part of your upfront expenses. You should keep additional funds to cover costs like stamp duty, conveyancing or solicitor fees, pest and property inspections, council rates, and insurance.
Once you are ready to buy a home, it’s a good idea to calculate your borrowing capacity and monthly repayments for different loan sizes to ensure you can service your loan comfortably. Knowing how much money you can afford to borrow will also help you narrow down your property search within that range. If you have queries about a home loan product, you can speak with a mortgage broker or ask a Hashching expert for their opinion.
4. Visit the property at different times
Your new neighbourhood can look and feel different on different days and even at different times of the day. For instance, a quiet lane on the weekend with a few cars might get crowded or congested with people and vehicles on a weekday. A perfectly safe area might look different at night without street lights. If possible, you should visit the property on the weekend and in the middle of the week, as well as during morning, afternoon, and night on different days to get a better idea of your new surroundings.
5. Get legal advice
Having a reliable team to work with can make your home loan journey seamless. One of the people you need on your team is a conveyancer or solicitor to review your contract and keep yourself protected from any potential legal or financial traps.
6. Strata report and pest inspection
Once you have found a property you want to purchase, you must check for any nasty surprises. You can smell for mould, knock on walls to check if they sound hollow, open the cupboards and check for any termite infestation, and look for signs of damage or cracks on walls and the roof.
You should also hire a qualified property inspector to find issues that might not be visible to the naked eye (failing waterproofing, leaks in the roof, poor drainage, etc). Getting a property inspection might cost you a few hundred dollars, but it can save you thousands in the long run. If you are buying an apartment or a strata property, you can get a strata inspection done to find out about the condition of the building.
7. Check for environmental hazards
It’s best to check for environmental hazards before buying a home. Even if you bag a great deal on a house, if the area it lies in is prone to floods, bush fires or other environmental hazards, it can bring down the value of the house and increase the risk to you. Your insurance premium might also increase if your house is located in an environmentally hazardous zone.