What do I need to know before buying a first home?
January 3, 2017 1:00 AM   Subscribe

I'm just starting to consider buying a first home - it will be an apartment in Canberra Australia but this, plus a basic budget is as far as I have got. Just wondering what do you wish you had known before buying your first home? What did you do that worked out well for you?
posted by EatMyHat to Home & Garden (17 answers total) 11 users marked this as a favorite
Go to tonnes of open houses. You'll basically need to devote your Saturday's to it for the foreseeable future but it will give you a great education as far as what to look for, how to deal with agents, what sort of prices places will go for etc. Track places to see what they end up selling for.

There is no one perfect house (flat, whatever). There will always be another. Obviously you want a place you'll be happy to own but keep emotions out of it. Going to tonnes of open houses really helps with this.

I spoke to a few brokers and then ended up choosing one. Mine made the process so straight forward and stress free. I really recommend using a mortgage broker than doing all the research yourself. I still made all the decisions. He also could provide me with a tonne of market data on properties I was interested in. Between my broker and my conveyancer everything was super smooth.

Read up on the processes for the ACT. I'm in NSW and it does vary state to state so relying on friends who bought in a different jurisdiction isn't that helpful.

Ask around in advance for recommendations for a conveyancer, building inspector and a company to do a strata report (if applicable). Things move really fast once you make an offer and in NSW you have five working days to get all the checks done - so after you've had an offer accepted isn't the best time to be looking for a conveyancer!

I had no idea what I was doing at first and reading stuff didn't help but it starts to click when you're seeing 5 or so places every Saturday. Ask for copies of contracts - they give them to potential buyers and being familiar with the contents really helps. I also used to follow other people around the opens listening to their questions - very educational!

If you are buying into a strata property investigate the bylaws as early as you can. I knew I wanted pets and some places that would not have been possible (at least not before I'd gotten on the committee and lobbied to change - may never have been possible).

The strata report (or whatever that is in the ACT) is really important and should give you background on any problems the building may have. In my experience most new builds in Sydney are mostly complete crap - really bad quality construction. Many reports I read talked of endless defects, owners corporations being forced to sue builders who had vanished and then having large special levies to rectify extremely expensive problems like concrete cancer. I was cautioned, and would caution friends, to stay far away from buildings with fancy features (gyms, pools, lifts) as they were prime for expensive levies and repair costs. I focussed on solid older walk up type blocks of flats - they built things much better 40 or 50 odd years ago than they do now. There are basically zero purchaser protections with new builds so I prefer to see that the building has survived a few decades (overseas mefites might think this is odd but construction regulations here are shocking and basically "sucks to be you" seems to be the response to people who buy places that are falling apart while brand new).

Sorry for the essay. Have fun!

Oh and check on whether the land is prone to flooding, bushfires etc. In NSW that's via local council websites, not sure about ACT.
posted by kitten magic at 2:11 AM on January 3, 2017 [10 favorites]

I guess it should add; it would have been great if i could have known all this in advance or absorbed it quicker but I think the experience was very helpful. I was very sure when I made the offer, the settlement period was stress free and I have had no regrets since (nearly 3 years as a first home owner now).

However, I moved from a flat to a town house and one thing I would have liked to know was that the novelty of taking my rubbish bins out would grow old really fast. Also that gardening was more fun in theory than practice and the lawn grows way too fast. I miss the fairies who did all of these tasks in my old building. But if you're buying a flat then hopefully these things won't be an issue!
posted by kitten magic at 2:35 AM on January 3, 2017

Before you make an offer, visit the location at 5am and 12 midnight to check for extreme noise.

Obviously you won't be able to enter the property at those hours, but you can see what the noise volume just outside the front door is like.
posted by Sockpuppets 'R' Us at 2:35 AM on January 3, 2017

Pay more attention to the neighbourhood than you think. Location, location, location.

I bought my first property in a nice enough area, but I realised quickly the neighbourhood was completely wrong for me and I spent the next few years being miserable. I wish I had paid more attention to who my neighbours were going to be and how easy it would be for me to make friends/acquaintances.
posted by kariebookish at 3:04 AM on January 3, 2017 [3 favorites]

Be careful! Probably the same as anywhere, but there are a few shonky builders out there, and they have left a legacy of maintenance issues. Ask around your workplace, check with the body corporate of any apartments you are interested in for maintenance issues and any disputes with the builder. Take your time, don't allow yourself to be rushed - there are lots out there, and if you miss one, there will be a better one coming along.
posted by GeeEmm at 3:15 AM on January 3, 2017 [1 favorite]

In Canberra the seller gets the reports done and you only have to pay for it if you end up playing buying the place. With strata titles, the report isn't as useful as the body corporate minutes anyway. Look at their sinking fund, look at any special levies they have discussed or decided on (and if one was already due, make sure your seller paid it before they sold). See what recurring issues they discuss. Are there often interpersonal issues, issues with pets, noise, or leaks or any other red flags?
posted by lollusc at 3:30 AM on January 3, 2017 [1 favorite]

The advice I was given by my parents and grandparents was to buy something in need of renovation. It's much cheaper, you really want to give it your own style, and the value added by a good renovation far exceeds the cost.
Now I am an architect - so I have to say that, but no one else in my extended family is, and everyone has done it. If you feel it is daunting, hire an architect, preferably before you buy the property. Ask around to find a small company with a good record of that type of work, specially with a good record of being on time and to price. They will know who the good contractors are. This should be doable for the same price as a new or newly renovated place, all included, and you'll both be much happier with the result and get a better (relative) price when you move on.
posted by mumimor at 4:37 AM on January 3, 2017

My one bit of advice is always borrow less than the bank says you can, and do not (aside from maybe your first round if just learning the market) look at homes that are out of the range you set for yourself. Don't give yourself the headache of falling in love with places past your budget.
posted by warriorqueen at 6:02 AM on January 3, 2017 [3 favorites]

Signing loan documents for your first home purchase is one of the most frightening things you can do. Some people get nightmares from it. This does not mean that you've made a horrible mistake.
posted by janey47 at 6:46 AM on January 3, 2017 [1 favorite]

Test the commute, in both directions and at the pertinent hours; get there early and then do the drive/mass transit to see how long it takes and at what cost (time, aggravation, parking, etc.). At the end of the day, do it in reverse. Too often people only visit on weekends and other off peak times and have no idea what lies ahead via-via getting to/from work.
posted by carmicha at 8:00 AM on January 3, 2017

I just bought my first home in the US, so some of this may not apply in Aus:

1) Your preapproval is pretty variable. You might be preapproved for a home up to a certain amount, but need to put more down than you'd initially thought because the bank will only finance up to a certain amount. So, say you are preapproved up to 500k. You have 100k to put down, but it turns out you need 150k, because the bank will only finance 350k. Confusing! So make sure you are totally clear on the preapproval before you write any offer letters.

2.) If you are looking at condos, be very discerning about the HOA fees, if there is a rental cap, and ask about assessments.

3.) Make sure you really like your realtor and your loan agent. If you can, ask a bunch of realtors about which banks they have had issues dealing with. If you are in a hot market, you want to be working with a whole team of people who are very responsive and on the ball.

3.) If you find a realtor you like, they should meet with you and walk you through the process of all of the disclosures and papers you'll need to sign for the home. This won't cover all of the loan paperwork, but it will still be pretty comprehensive, and will help you ask important questions when looking at houses.

4.) If it doesn't feel totally right, don't offer! The right place will make itself known to you.

5.) Open houses! Look high and low. Look below your budget, look above it. Get to the point where you feel you've seen every house in Australia. You will feel so much more confident if you do this.

6.) Make your net searches very broad. Search for square footage only. Some places (in Seattle, at least) are very strict about what counts as a bedroom. It must have a window and a closet. My house was listed as a 1 bedroom and so it flew far under the radar. It's really a 3 bedroom in terms of living.

Good luck!
posted by pazazygeek at 8:53 AM on January 3, 2017

Do your best to ignore the "skin" of the house and all the temporary staging (or lack there-of) - don't get bothered by the paint colors, the surface treatments, even the carpets and flooring to a degree. And try to visualize the rooms with your own items - where would everything go, how would you use the spaces?

You can repaint, re-carpet and refloor easily enough (and even use that as a bargaining chip - "I'll be repainting some rooms/ everything and bringing in new carpet, so I'll offer you 1-3% less than I would otherwise"), and if their stuff looks tacky or is too big or small for a given room, remember it's not staying there anyway. But do pay attention to the condition of the roof, flooring and paint, look to see if the furniture is being used to hide or obscure serious issues.
posted by filthy light thief at 11:54 AM on January 3, 2017 [1 favorite]

Best advice I ever got was to go to the basement first. You are not buying a house. You are buying a foundation, a roof, wiring and plumbing. Any of those things not in pristine order, you need your eyes wide open. Everything else is cheap in comparison.
posted by Toddles at 6:09 PM on January 3, 2017 [1 favorite]

I bought a townhouse in the ACT back in 2009.

Look into whether you are eligible for the first home owner grant and also for concessional and/or deferred stamp duty. I only got a slight discount on my stamp duty but didn't have to pay any of it for 5 years and it accrued interest at a much lower rate than the loan, so it made more sense to pay the loan down faster. I don't think these are as generous anymore, though.

If the properties are furnished, have a good look around under/behind things. I discovered lots of random annoyances later because of this. Take copious notes at open homes because if you're looking at 5 or 6 (or more) a day, you won't remember detail.

Make sure you get a good mortgage broker. Mine was not fantastic, and I ended up having to talk directly to the bank to make things happen on time, and that whole process was very stressful (don't settle a week out from Christmas, everything takes twice as long as normal, more if the ACT government is involved!). Likewise, a good conveyancer will be a godsend.

In the ACT the building report will have already been done by the seller (you can choose to pay for a more thorough one though, if you want - they are the most basic version). It should be available to look at at open homes, or the agent will email it to you after on request - some now put them on the listings on Allhomes and other websites which is super convenient.

Definitely go by at different times of day and pay attention to noise and the feel of the neighbourhood and if it suits you.

In Canberra I am aware of several people with bad experiences with newer properties, especially people buying off the plan. In my opinion there are some real bargains to be found in outer suburbs with properties built in the '90s or earlier.
posted by cloverthistle at 7:10 PM on January 3, 2017

Contact the local council and ask to see any development applications (building, complying development, minor works, etc), if you have an architect or builder you can take with you even better, though most Councils will have a planner who will answer questions too. Read the submission letters too. Some documents may be available on the website.

Talk to Council (or at least read, should be on the website) about the current local environment plan. That way you know whether or not the quiet semi-industrial neighborhood is about to become the next Brooklyn (and you can avoid or jump in early accordingly!).

Plug the address into this website, and see what else is being developed/built in the area (and what folks think about it).
posted by jrobin276 at 7:20 PM on January 3, 2017

With strata titles, the report isn't as useful as the body corporate minutes anyway. Look at their sinking fund, look at any special levies they have discussed or decided on (and if one was already due, make sure your seller paid it before they sold). See what recurring issues they discuss. Are there often interpersonal issues, issues with pets, noise, or leaks or any other red flags?t

Just to clarify, this is what I meant by the strata report. The company provides all this to you; otherwise you would be doing the legwork to obtain the information. Odds are they can provide it quickly if they did it recently for another seller in the building.

Great to hear that the sellers provide all that in the ACT. Makes things much easier and cheaper. I paid for reports on numerous buildings I then noped the hell away from. Certainly worth it but would be nice if they'd just provide the info upfront. NSW property purchasing is very much buyer beware.
posted by kitten magic at 2:17 AM on January 4, 2017

Response by poster: Great advice all round - thank you everyone!!
posted by EatMyHat at 5:39 PM on January 5, 2017

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